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References


Articles

  • How to Fight a Price War" by Akshay Rao, Mark Bergen, and Scott Davis, from The Harvard Business Review
    "Price wars are a fact of life—whether we're talking about the fast-paced world of 'knowledge products,' the marketing of internet applications, or the staid, traditional business of aluminum siding. If you're not in a battle currently, you probably will be fairly soon." Price wars are not simply a matter of responding to a competitor's aggressive price move with one of your own. Instead you should consider all of your options, including defusing the conflict, retreating or, if a battle is unavoidable, fighting it with an arsenal of weapons beyond just price cuts themselves. (Link to HBS reference)
  • Using the Anticipation of Competitive Actions to Make SMART Pricing Decisions," by Scott Davis, John Cripps, and Steve Kutner, from the Journal of Professional Pricing. (HTML, PDF)
    In changing environments, it is critical to not only identify your own opportunities, but also the opportunities of your competitors and their likely actions. A failure to account for the ways a competitor adjusts its product offerings and prices could result in a significant reduction in profitability. By using a SMART analysis to predict their likely actions, a manager is better able to adjust prices quickly, and possibly preemptively, in a way that will yield the greatest profit over the long run.

  • Introducing Reactor™ (HTML, PDF)
    Reactor™ is a market simulator developed by Strategic Marketing Decisions to help product managers and pricing decision-makers make better pricing and product line decisions. It uses cutting edge market modeling techniques to forecast the impact of different pricing policies on key performance metrics such as unit sales, market share, revenues and profits by systematically using a combination of customer research, market data and managerial judgment. It helps product managers develop and test various competitive pricing hypotheses making it possible to reliably predict how competitors will react to price and market changes. This capability enables better forecasts of the long run impacts of changes in prices or other market variables and helps avoid unnecessary price wars. This methodology is superior to “what if” analyses by developing predictions of competitors’ responses and the resulting consequences, rather than simply asking what would happen if a competitor were to respond in a particular way.