Jeff Bezos on Pricing Strategy

"There are two kinds of companies — those that work to raise prices and those that work to lower them." Jeff Bezos, founder & ceo of AmazonMucho kudos to Todd Sattersten for the quote.

Comments

[denise lee yohn]

i recently revisited an early 90's HBR article about different value disciplines companies use to create competitive advantage -- operational efficiency, product leadership, customer intimacy. if a company is focused on operational efficiency, as amazon does, it indeed works to lower prices -- but if a company is focused on product leadership or customer intimacy, raising prices seems a worthy goal -- no? -- denise lee yohn

[john moore (from Brand Autopsy)]

Denise ... that Discipline of Market Leaders article (and book) is golden. I agree with ya. To focus on being great at product leadership means investing money into R&D and the higher the margin a company commands dictates how much they can invest in R&D.

Also, being great at customer intimacy means spending money to ensure customers are happy. Which means employees need to be trained and customer-advantageous policies need to be in place. All that takes money and higher margins provide that.

Being great at operational efficiency means streamlining processes to reduce expenses which always a company to thrive on lower margins like Wal-Mart.

BTW ... that Treacey and Wiersema book was the turning point in this marketer's life. It changed how I viewed business and ignited a passion for business that I never knew I had in me.

[Al Pittampalli]

Jeff really walks the walk. You can really see that with the recent dramatic price reduction for the Kindle. Amazon is focused on the long term at the consumers' benefit.

[tony]

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