1. The Price is Really Right Jaime Burnap Tim Anna Will Pak

2. What it is  “Smart pricing”  Using the web and existing company information  SAP  DemandTec Inc  ProfitLogic Inc  HP & General Electric

3. Why?  “We still price like the Phoenicians”  Adapt to trends quickly –Change prices in the blink of an eye  “Getting pricing right remains one of the few untapped sources of growth” – McKinsey & Co.

4. Pros  Increase annual sales by at least 1%  Can suggest new products for customers based on shopping history  Calculate costs quickly and easily

5. Cons  “Perfect pricing” -- Amazon.com  High priced soda machines during hot weather?  Extremely expensive – up to a million dollars for software

6. Case Studies  DHL  Pricing lumped together from Tokyo to London  High prices made customers run to FedEx and UPS  The system tested the market by offering cold callers different prices to learn how low prices could go and still make a profit.  25% cold callers turn into customers, up from 17%  Revenue up 13.2% and gross margins up 5.2%

7. Case Studies  J.C. Penney  Quarterly revenue from marked- down items up 15 million to 20 million  Dillards  5%-6% increase in gross margins across 17 departments

8. Source  Business Week; 3/31/2003 Issue 3826, p62-67, 4p, 1c