Pricing In Competitive Environments was a presentation delivered by Equinox CEO and Director for Economics Services, Bernard Mallia at LEAD Events’ Management Expo 2013.
Among other things, it covered the theoretical aspects of pricing, where the conventional view from the ivory tower was presented both inasmuch as the supply perspective and the demand perspective are concerned. It differentiated between upstream and downstream prices and went on to look at the pricing process in practice. The areas explored, which were delved into in detail in the presentation included the identification of potential clients and their profiling, the packaging of the product / service, investment in branding, brand positioning on the market in different ways, investment in advertising, market segmentation and differential charging by cluster and service level.
The presentation also dealt with cost coverage and recovery, cost typology (direct, indirect, fixed, variable, semi-variable), Activity-Based Costing as a way of determining costs and their apportionments and the concept of contribution. It emphasized that for a product / service line to be sustainable, costs need to be recovered, although pricing strategies could also allow for losses on a particular line of services / products if such losses attract other business that makes up for more than the loss on that specific product / service line that is serving as a loss leader.
Tying and Bundling strategies, together with customer lock-in were also discussed, together with the importance of the availability of accurate data for pricing purposes.
Lastly, the presentation dealt with regulatory obligations in pricing. The discussion here revolved around the definition of dominance and significant market power and their treatment in Sector-Specific (ex ante) Regulation and competition regulation (ex post), specifically Article 101 TFEU (Cartels) and Article 102 TFEU (Abuse Of Dominant Position).