Snatching Defeat from the Jaws of Victory
Why Do Good Managers Make Bad Pricing Decisions?
Marketing Management
Summer 1997

Abstract:
"War is too important to be left to the generals" is a phrase sometimes heard in military circles. In the same sense, pricing is too important to be left to intuition, guesses, and presumptions. To be successful, managers must develop pricing policy on the basis of sound models of customer and competitor behavior. Pricing decisions are crucial to business success because they link directly to revenue generation. Many managers, however, seem to make pricing decisions intuitively, with little market-based understanding. This article explores why managers sometimes make pricing decisions unsupported by market knowledge and proposes a process to enhance decision-making.

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