During the last decade websites used for comparing auto insurance rates such as onlineautoinsurance.com and insurance.com as well insurance firms’ own websites have become a popular way for consumers to shop for insurance. By 2005 it was estimated that nearly 70% of insurance shoppers used the internet to obtain price quotes[1]. Naturally, this kind of ready access to price comparisons has lead to a more price competitive market and commoditization. I sat down with John Lucker, a Principal at Deloitte Consulting LLP, to discuss the auto insurance industry and how firms can creatively package and price insurance to overcome any commoditization of their product.
Read the rest of this entry »

“Let’s just take the store brand,” I heard a wife tell her husband as they perused an aisle at a local supermarket. “It’s about a dollar cheaper” she continued, “and it’s just as good as the one we used to buy.” It should come as no surprise that a middle class family was willing to choose the private label (PL) product to save a dollar on one of the many items in their overflowing grocery cart. Families for whom groceries constitute a larger share of household expenditures are likely to be more price sensitive on average. What is intriguing, however, is that the store brand, which at one time was perceived as low quality, low price, is now being compared favorably with the name brand by consumers. Does this mean that the pricing landscape has changed for PL products? If so, what are some of the challenges that they face as they continue to grow and thrive in today’s economy? And how should name brand producers respond to such pressures? I spoke with Kim Frazier & Chris Goodin, from Deloitte Consulting LLP to get some insights on what has been a dramatic change in the PL industry and what pricing strategies are employed once launched at a retailer.
Read the rest of this entry »

As the football season comes to an end with the Super Bowl, many sports fans look forward with eager anticipation to spring training and the start of the baseball season.  A perpetual optimism reigns for most fans, even though for some this hope will be replaced by doubt in a few short weeks. In recent years, many teams have started bundling food and drinks with admission tickets. Premium sections sometimes also include seat-side service from a wait staff. I sat down with Rob Friedman, a Director in the Strategy and Operations practice of Deloitte Consulting LLP, to discuss ticket prices, bundling, and various strategies that baseball franchises can use to draw fans into their stadiums and increase profits.
Read the rest of this entry »

Pricing is always important for any business, but in these hard economic times the role of pricing is crucial for a company to succeed or simply survive. In 2009, as home foreclosures, bank failures, and layoffs mounted, consumer spending habits changed to reflect the increasingly bleak economic climate. Large swathes of firms reacted by lowering prices. Amidst the sea of discounting, however, some companies, such as Abercrombie and Fitch, sought to maintain prices. Perhaps surprisingly, Starbucks recently chose to raise prices on its premium offerings, while simultaneously lowering the prices of it low-end products. What is the right strategy to survive and ultimately profit from a recession? We sat down with Ranjit (Jit) Singh from Deloitte to help understand how companies can approach pricing strategy in tough economic times.
Read the rest of this entry »