Pricing Trivia #1

Here are some useful bits of pricing trivia and pricing anomalies that I have found over the years. They may no longer be valid, but they are thought provoking nevertheless:

• In the summer of 2003, the Air Tariff Publishing Company held 48,019,078 airfares is their database. That might explain why…
  
• In April 2004, the lowest economy class round trip airfare from Dallas-Fort Worth to Honolulu on American Airlines was $US1,060. However, if you purchased a Dallas-Fort Worth – Jas Jose round trip ticket (for $346) and a San Jose – Honolulu round trip ticket (for $350), you would have saved yourself $364.
  
• It is cheaper to fly 1,120km between Beijing and Shanghai than it is to drive. If one takes the Beijing to Shanghai expressway, you would have to stop ten times to pay tolls to the value of 500 yuan (approx. $US60). And that doesn’t include petrol. The tolls alone are cheaper than a discounted airfare.
  
• Unkechaug Indians can legally buy and sell tax free cigarettes. Drop buy the Poopatuck Smoke Shope (near Mastic, Long Island) and you can pick up a pack of cigarettes for between $US2.00 and $US3.50. In nearby New York City, you would pay $US7.00.
  
• Head across the US border, from Phoenix of Tucson, Arizona, into Negales, and you’ll be able to pick up prescription medicines for about ¼ of the price there are in the USA.
  

Post M&A Pricing

Last week, Symantec announced that its pricing strategy, post its merger with Veritas, could take a year to sort out.

In a report published on Silicone.com it was noted that Symantec sold it products using a diverse range of pricing models including single user licences and site user licences. Veritas on the other hand sold its products primarily on a CPU basis.

As Mike Marn et al have noted in the book The Price Advantage, post M&A pricing is an increasingly important area when it comes to pricing.

Pricing opportunities can contribute as much as 30% of post-merger synergies and companies can be richly rewarded with post-merger pricing opportunities. After all, the customers, competitors & employees all expect expect change after a merger or an acquisition. Given that post-M&A opportunties may only last for 6-12 months, one wonders where this merger of computer security heavyweights will be able to capitalise on such an opportunity?

Forthcoming Speaking Engagements

Interested in learning a bit more about pricing? Why not come along to one of the following events at which I will be running various pricing workshops...

Marcus Evans' Pricing Optimisation Conference
22nd & 23rd September 2005, Duxton Hotel, Melbourne

Marcus Evans' Holistic Pricing Masterclass
26th - 27th Septmber 2005, Grand Copthorne Waterfront Hotel, Singapore

Pricing Workshop
8th October 2005, CAE Business Connect, Melbourne