|
by: John T. Gourville, Dilip Soman
Amazon.com's Price: $6.50 Prices subject to change.
Binding: Digital
Format: Download: PDF
Label: Harvard Business Review
Manufacturer: Harvard Business Review
Number Of Pages: 9
Publication Date: September 01, 2002
Publisher: Harvard Business Review
Release Date: October 25, 2008
Sales Rank: 2450029
Studio: Harvard Business Review
Editorial Review:
Product Description:
Most executives know how pricing influences the demand for a product, but few of them realize how it affects the consumption of a product. In this article, the authors argue that the relationship between pricing and consumption lies at the core of customer strategy. The extent to which a customer uses a product during a certain time period often determines whether he or she will buy the product again. So pricing tactics that encourage people to use the products they've paid for help companies build long-term relationships with customers. The link between pricing and consumption is clear: People are more likely to consume a product when they are aware of its cost. But for many executives, the idea that they should draw consumers' attention to the price that was paid for a product or service is counterintuitive. Companies have long sought to mask the costs of their goods and services to boost sales. And rightly so--if a company fails to make the initial sale, it won't have to worry about consumption. The problem is that masking how much a buyer has spent on a given product decreases the likelihood that the buyer will actually use it.
Customer Reviews
Average Rating: 
Rating: - A good teaser though needs more actionable recommendations
I read this article in the HBR but found this when looking for a way to provide it to others. This quick review assumes it's the same content.
This article teaches ways price can affect consumption. It highlights good examples of how timing and distribution of pricing can increase retention, smooth consumption (and decrease the "peak activity" that really drives cost forecasting in service businesses), and increase purchase satisfaction. It primarily cites data from a study of health ... Read More
|
