Why is Pricing Under-Loved and Over-Leveraged?
Buyer beware
Sophisticated pricing strategies are designed and used by the smartest sellers in any industry.
Both online and offline. Including, for example, pricing aggregators and price comparison websites: many success stories have been built on unique pricing insights, leading to growth in revenues, margin and market share. Truly fascinating.
Even in capitalist markets, where pricing is the ultimate mechanism to match buyer and seller of any economic transaction, good old human psychology can obfuscate rational decision making.
Even in otherwise apparently efficient Internet e-commerce complete price transparency is uncommon; academic research and government regulation are mainly focused on the pricing of financial instruments, rather than ‘real world’ products and services.
Caveat emptor. Buyer beware.
Some challenges of the pricing practice
Optimal pricing, even in 2020, is still somewhat more art than science:
