Treating profit maximisation as the sole pricing objective not only is gross oversimplification but also may undermine the broader objectives on an organisation.”
– Kerin and Peterson (2103) Strategic Marketing Problems pp 467
Textbooks generally treat the subject of pricing policy adequately. Kerin & Peterson in particular have an excellent chapter on the subject which the cohort had read ahead of my lecture so last Wednesday’s discussion was quick. And although some local cable providers reportedly had a cease and desist order for distributing some channels illegally, it generated little interest, perhaps because not many students pay for their own cable television service.
But that was the classroom. Time now to hear from the real people at the heart of the massive (by percentage only) informal Jamaican economy. So off to downtown Kingston we go two days later to observe marketing in practice in general, and buying behaviour in particular.
In the inner city every dollar counts and price rules. In fact there is perfect information on prices. And whereas most have never read a word on pricing policy, and are unfamiliar with the term value proposition, they know a good deal when they see it. Equally, they know when something seems amiss. Like the case of the itinerant young vendor offering “uptown” perfumes downtown and cannot make a sale.
But he’s young. Soon he’ll develop the street smarts and heed the words of a wily veteran (did I say past master?) whom we overheard.
But what a way him bright! Selling stolen goods at regular price!”
– Jamaican Higgler (2015)
Now, if only I had the benefit of that lesson before my lecture on pricing strategy!
Herman D. Alvaranga solves the toughest marketing and sales problems.