For too long, people have made unsubstantiated but damaging assumptions about pricing. Changes in prices, for example, was viewed as a simple, rapid and reversible, and the new technology, which only reinforced the thinking. In addition, the extraction of the value of the products, assessing correctly been regarded as relatively easy, the hardest part of creating a valuable product in the first place. But this disdain for the price to miss. Price is complex, and it only grows more so as new tools and methods become available. Ability to set the right price at the right time, at any time - the very definition of pricing power - is also becoming increasingly important. In fact, in the process of working with dozens of companies in the last couple of years, the authors spoke with several leaders, who believe that the development of pricing capability is critical to the survival of their business. They back up their views by investing in three areas: human capital, systems, capital and social capital. The authors explain the nature of these investments, and how they come together to create the possibility of a price that competitors will have a hard time emulating. Creating these opportunities requires an effort that some companies may not be able to take over. Those that are truly integrated approach, however, can make an excellent price decisions that are consistent with their positioning, customers, suppliers, and develop market conditions for many years. "Hide
by Shantanu Dutta, All Bergen, Daniel Levy, all Ritson, All Zbaracki Source: MIT Sloan Management Review 8 pages. Publication Date: April 1, 2002. Prod. #: SMR080-PDF-ENG
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