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Smarter Pricing: How to capture more value in your market by Tony Cram

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1. Pricing by voodoo or bingo? – there’s a better way

For Lacoste, the aspirational clothing brand, it was tough selling across the USA in the 1990s. Customers were more demanding than ever. They had more choice. The competition in up-market clothing was intense. More spending on promotion and advertising affected margins. Costs were rising. The licence for the USA had been held in the 1980s by General Mills and, by the late 1990s, the crocodile logo appeared on shirts retailing for as little as $35. According to Jonah Bloom, writing in Advertising Age, this low price cheapened the brand and forced General Mills to cut costs to maintain margins, using inferior fabrics and manufacturing techniques. Poorer quality reduced sales putting further ...

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