Marketers need pricing that fits like a wetsuit, following the nooks and crannies of customer preference and spending constraints, stretching and bending as the economy shifts up and down. One consumer products manufacturer was caught off guard by a rapid shift in consumer interest from premium convenience packages to larger, better-value packages; the company discovered during the shift that the larger packages were not profitable. As they seek to prevent this kind of pricing surprise and to realize profits, manufacturers and retailers must work together more closely than ever before, minimizing the friction that raises prices and causes inefficiency.
Richard Rawlinson is a partner with Booz & Company based in London. He focuses on the leadership agenda for consumer-oriented and services clients. He was a lead contributor to Capturing the People Advantage: Thought Leaders on Human Capital (strategy+business books, 2008).