Changing pricing and merchandising strategies in retail

Stephanie Rosenebloom writes in the New York Times: In Recession, Strategy Shifts for Big Chains (June 20, 2009). Retailers continue to re-engineer the industry to maintain positive profitability. The recession has forced the hand of several major retailers to bring prices and product offerings in-line with the new frugality of consumers.  Luxury retailers are broadening the product mix to include more mid-priced product.  Mid-tier retailers are offering fewer product options but trying to make up for it with premium service  levels. Most interesting: “One of the biggest changes consumers are likely to see is greater personalization and regionalization of merchandise.” Looks like more progress for the concept of “mass customization.”

Where margins are already slim, pricing strategies have limited ability to enhance competitiveness. Retailers are doing well to re-orient their supply chains around getting the right product at the right time to the right customer. Wal-Mart has been doing this for years by empowering employees at individual stores to report on merchandising needs.

It will be worth monitoring the changing landscape in retail for lessons in other high-touch businesses.

Webinar: Mind Tricks: How the Brain Reacts to Price-Based Offerings

This free webinar from the Stanford Graduate School of Business, Executive Education, looks interesting. I hope to post a review soon after attending:


Title: Mind Tricks: How the Brain Reacts to Price-Based Offerings
Host: Professor Baba Shiv

Date: Tuesday, June 23, 2009
Time: 8:00 AM – 9:00 AM (Pacific Daylight Time

In light of the current recession, the media is filled with stories of consumers favoring products that deliver a price-based value proposition. Recent scientific investigation concerning how the brain processes information throughout the consumer decision making process has uncovered many surprising findings. In fact, these findings counter the conventional wisdom surrounding the development of a successful customer value proposition.

Professor Baba Shiv, Professor of Marketing at the Stanford Graduate School of Business, will examine the customer value proposition from the perspective of the buyer decision making process.







  Based on insights gained through cutting-edge neuroscience research, the key takeaways will include:

  • The interplay of pricing and benefits in creating value
  • The hidden downsides of a price-based value proposition
  • An examination of the brain’s emotional circuitry and its impact on purchase
  • Findings from recent fMRI examinations of brain activity
  • Practical solutions for brand managers and marketers




  baba shivBaba Shiv is Professor of Marketing at the Stanford Graduate School of Business. His research is in the area of consumer decision making and decision neuroscience, with specific emphasis on the role of emotion in decision making, the neurological bases of emotion, and nonconscious mental processes in decision making. His rece nt work examines the potential for nonconscious placebo effects related to pricing, showing for instance that the higher the price of a product (e.g., wine) that one consumes, the greater the pleasure one experiences as manifested by a higher level of activation in brain centers that code for pleasure. Your attendance will also give you a glimpse of the Strategic Marketing Management experience and will further demonstrate the value that our ten-day advanced management program can provide to you and your organization.





Welcome to the Thought Blog for Ahan Analytics, LLC. We will be discussing a range of topics on how to use analytics to make business better.

Ahan Analytics, LLC finds the “a-ha” in your data that will improve business performance. We enable decision-making in the face of complexity and uncertainty so that your business can sustain its improvement. We provide specific expertise in pricing strategy, price optimization, operations management, and product lifecycle management. We use the tools of data analysis and analytical modeling to deliver superior results.

We look forward to a lively and productive discussion!