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Introduce Innovative Pricing Systems

In: Beating Inflation

Author

Listed:
  • Hermann Simon

    (Simon-Kucher & Partners)

  • Adam Echter

    (Simon-Kucher & Partners)

Abstract

The current inflation should introduce innovative pricing systems enabled by technology that was absent during the 1970s. Dynamic pricing is expanding beyond travel & tourism to facilitate rapid, demand-driven price adjustments that help sellers outpace inflation. Performance-based pricing links prices to value delivered which scales with inflation. Outfitting products with the technology to document value delivered should prove a powerful tool for creating real growth under inflationary conditions. Today’s technology allows the creative unbundling of products with impressive examples such as the chassis of an automobile from its motive power. Inflation will stimulate accelerated creativity in both unbundling and bundling of goods and services. Freemium price models are problematic in inflation as the spread between zero and the premium price increases; those who deploy this strategy must keep a close watch on the gap between their free and paid tiers. The authors expect the current inflation to usher in exponential growth of innovative pricing systems across all industries.

Suggested Citation

  • Hermann Simon & Adam Echter, 2023. "Introduce Innovative Pricing Systems," Springer Books, in: Beating Inflation, chapter 11, pages 91-98, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-20093-9_11
    DOI: 10.1007/978-3-031-20093-9_11
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