Originally Posted by
acl65pilot
Couple of points:
Pricing is one of the most powerful -- yet underutilized -- strategies available to businesses. A McKinsey & Company study of the Global 1200 found that if companies increased prices by just 1%, and demand remained constant, on average operating profits would increase by 11%.
(1) McKinsey did not model the loss of business by those price sensitive purchasers who simply buy the cheapest thing. Sears had better products than WalMart. We see how the "only a couple of percent more" pricing strategy worked for them.
(2) McKinsey & Co. has been found lurking around the carcasses of bankrupt airlines more often than John Wayne Gacy was found in the general proximity of homicide investigations.