3 ms·
I think the title is a little strange - nothing in the article actually talks about optimal pricing strategies. > [Graph] - The most efficient merchant charges
by Closi 4y ago
I think the title is a little strange - nothing in the article actually talks about optimal pricing strategies.
> [Graph] - The most efficient merchant charges the optimal price for each customer - the highest each customer is willing to pay.
The graph doesn't show that - it actually shows how to maximise revenue while offering a single price point for all customers.
In reality, this isn't the optimum way to pick a price though - because you probably want to optimise for profit rather than revenue (and these price points aren't likely to be the same).
> [There are multiple items at different price points, and...] It struck me, though, that this was an excellent example of optimal pricing
I wouldn't call this pricing actually - I would call this ranging.
Pricing is the exact pounds and pence put against an item, while ranging is the idea of offering different products and services to meet different segments. Mr Monopoly Man might not want a $1 hamburger, but might settle for an ultra-mcdonalds-premium-delux, so ranging that higher-end product helps the company appeal to wider demographics.
But 'having different products and making them different prices' isn't usually considered a pricing strategy.
- zeroonetwothree 4y agoThe article is all over the place.