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Professional Pricing Society’s Spring 2010 Conference

May 6, 2010

Posted by Ed Arnold

Posted in Pricing, Why LeveragePoint?

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Today is the first full-day of the Professional Pricing Society’s Spring Conference. Turnout for this year’s conference has been excellent – over 500 attendees.

I attended Dr. Tom Nagle keynote presentation this morning on Advantage-Based Marketing.  Some key nuggets:

When Tom wrote the first edition of the Strategy and Tactics of Pricing 20 years ago, his expectation was that pricing strategy (the long neglected “P” of the 4-P’s) would rightfully be absorbed into mainstream marketing practice.  Yet in many respects, the aims of marketing seem at odds with price optimization.  So pricing really belongs in the universe of profit management.

The main obstacle to profit management, according Tom is the disconnect between the cost and revenue side of the businesses. He cited examples of companies that have failed because they optimized one side at the expense of the other.  Likewise he notes that profit success stories like Walmart are studied in B-Schools for their cost management only.  Actually it’s the integration of both sides which is key to success.

Tom told the story of QuadGraphics whose founder grew the company from a single-press operation into a market leader by following the founder’s (Harry) unique philosophy of business.  Harry’s rules focused on selecting customers that could be well served by his business model. This allowed him to serve them at low cost, which lead to higher profit which he invested in more capability to grow.

We’ll add more posts as the show goes on.

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