From the course: Data Analytics for Pricing Analysts in Excel

Unlock this course with a free trial

Join today to access over 25,500 courses taught by industry experts.

Best practices in pricing

Best practices in pricing - Microsoft Excel Tutorial

From the course: Data Analytics for Pricing Analysts in Excel

Start my 1-month free trial Buy for my team

Best practices in pricing

“

- [Instructor] One of the key truisms that we've talked about throughout this course is that trade off between price and volume. A firm can choose how many units it wants to sell or it can choose its price, but it can't choose both. If you're going to try and maximize unit sales, you're going to have to follow a low price strategy. If you're trying to maximize your price and hopefully profitability, you're going to have low sales. Now, one important point to note, a unit of price is more valuable to a firm than a unit of volume. If you could choose between a 1% increase in price or a 1% increase in volume for your firm, you should always choose the unit of price. Why is that? Well, the answer is cost of goods sold. Price flows to the bottom line directly while volume is diluted based on the level of COGS that your firm has. This is even true for zero marginal costs producers like software companies. the reality is that…

Contents