Thanks to a Slashdot.org
reader I saw this AP article
about retail price optimization and a related one
with some examples. The one misleading impression you could get from the article is that such pricing optimization software works primarily for retailers. Not so. Pricing, whether b-to-c or b-to-b, is generally an area little understood and poorly controlled by companies. Many of the same techniques work for manufacturers - and, I'd guess, even for service providers. The real advance here is getting away from guessing what pricing strategies might work and using analytical methods to create candidates to test. Notice that test is different from submit to. Many people assume that technology cannot be wrong, and so figure that if the suggestion comes from one of these admittedly complex systems, it must be right. Not so. However, using the recommendations as something to try and then to judge the results would seem a smart approach.
Labels: optimization, pricing, retail