You are here
The Professional Pricing Society (PPS), an association that supports price decision makers and price management personnel, urged its members to keep their prices stable and resist sudden changes in pricing strategies and promotions in the wake of the Sept. 11 terrorist attacks on the World Trade Center and the Pentagon.
"We have heard numerous stories of price gouging, including items such as gasoline and American flags," said Eric Mitchell, president of the Professional Pricing Society. "Actions along these lines are always disturbing, but particularly so in light of the recent national tragedy. We urge all PPS members and other executives in charge of setting prices for their products and services and to maintain stability in their pricing, promotions and quoting activity."
According to Mitchell, some firms might be tempted to price gouge because of perceived shortages and disruptions in markets, but such an act would prove harmful in the long term.
"History tells us that firms who display fairness are rewarded and those who attempt to gouge will be punished by consumers, customers and the press," Mitchell said. "With communication flowing even faster today than just a few years ago, there surely will be retribution for unfair pricing."
Mitchell urged his 1,000 member organization of pricing and marketing executives to help their firms in these unstable times with these strategies:
* Be sensitive before enforcing existing pricing terms and conditions clauses so that customers don't suffer due to circumstances that were out of their control.
* Avoid overreacting with across-the-board, deep discounts and price cuts. Mitchell said that such schemes may not jump start sales at all and may backfire in the long run.
* Test new promotional ideas and pricing strategies before implementing across the board changes. Mitchell stressed that any good pricing strategy is worth testing in the market first, to determine it's effect on sales and profits.
* Implore resellers to avoid sudden price hikes. Producers don't control reseller prices but harm can come to a firm if its distributors act poorly in these volatile times. Mitchell urged firms to find creative and positive ways to suggest to its resellers a period of stable and fair pricing.