Pages: 68

No chapter abstract available.

Pages: 18

This chapter introduces the idea of using the power of pricing to improve profit, growth, and societal good. Price is a crucial lever for companies, and small changes can have a big effect on profitability. However, most companies, non-profit organizations, and governments still have a narrow view of pricing, seeing it as merely an economic or marketing tool to influence profit. Relatively few have effectively harnessed the power of pricing to implement change for societal benefit. For many corporations, this is a missed opportunity. This chapter demonstrates that price can be used not only to enhance profits and market share but also to manage demand, incentivize consumer behavior, and encourage positive change in communities. When this powerful lever is used for societal good, the impact can be effective and quick. Pricing can be a means to preserve the environment, alleviate poverty, and improve health. “Purpose-driven pricing” strategies can improve the quality of our lives, create a sustainable planet, and even save lives. The chapter concludes with a seven-step process for purpose-driven pricing.

Pages: 17

When a firm allows financial profits to become its main focus, the decisions that ensue may not be aligned with the firm’s overall purpose. As businesses shift from customer-centric to society-driven, aligning pricing with this mindset will make the transition easier. However, there seems to be a lack of understanding when it comes to internal decision-making frameworks, especially with regard to how pricing decisions impact society. For firms to adjust – and to leverage external opportunities for the benefit of society – their internal processes and area objectives must align with their overarching corporate goals. This chapter discusses ways of measuring and quantifying the monetary value of a firm’s impact on society using financial models. We discuss how to align price with both purpose and profit from an internal company decision-making point of view.

Pages: 18

This chapter explores the importance of using prices, incentives, and promotions at the different “diffusion of innovation” stages to mobilize change to more purpose-driven behaviors. After a review of the diffusion of innovation model, we introduce pricing strategies that can accelerate the adoption of purpose-driven products and services at each diffusion stage. These strategies focus on maximizing a product’s perceived value, leveraging momentum, making the product more affordable and accessible, and maximizing market penetration. They can help companies navigate the complex processes that underlie the diffusion of innovation while maintaining a focus on the impact of prices on consumption in the context of societal and environmental good.

Pages: 13

This chapter discusses behavioral pricing and how we can use it to incentivize purpose-driven behaviors. It starts by introducing key behavioral pricing theories and concepts, which are then illustrated using examples and case studies. It highlights concepts drawn from behavioral price research relating to how people respond to price information. Relevant research is discussed which provides guidance on both price setting and price framing with the aim of increasing customers’ propensity to act based on societal values. This chapter emphasizes the importance of tailoring messages and internal processes, as well as using prices, incentives, and promotions to mobilize change to more positive behaviors.

Pages: 60

No chapter abstract available.

Pages: 19

In this chapter, we describe ways to use government financial interventions – such as subsidies, tax credits, and taxes – in accelerating change to benefit people and planet and/or arresting practices that are detrimental to society. Government subsidies, for example, have brought down prices for electric vehicles and solar panels, thereby positively impacting the consumption of these goods. Public health initiatives such as free Covid-19 vaccinations can significantly impact individual and community health. Government laws and regulations play a major role in creating better societies; in this chapter, however, we have limited our discussion to financial incentives (and disincentives) because these have direct monetary impacts on companies and the prices consumers pay. They can also support companies in their sustainability journey and help them transition to pro-social technologies sooner. We explore how governments maintain positive progress and, more importantly, how they prevent regression to former negative practices.

Pages: 14

This chapter begins with the idea of “bringing the customer along on the journey” when devising strategies to promote pro-social goods and services. This means taking the psychology of the consumer into account. Examples are provided of companies that have managed this successfully. It then goes on to look at why people make pro-social choices, with two key reasons being identified. Pricing strategies to stimulate pro-social behavior are illustrated using the example of supermarket shopping bags. The chapter then discusses the perils of an internally misaligned and incomplete approach, which can lead to charges of greenwashing and the negative publicity that entails, negatively impacting customer brand perception. Finally, there are three recommended ways of implementing purpose-driven pricing, one of which involves a detailed exploration of the risks of giving away public resources for free.

Pages: 20

This chapter begins by looking at the Sustainability Continuum: a measure of how far a firm has traveled on its journey toward full transformation to sustainability. Four barriers to progress along the continuum are identified and discussed – motivation, knowledge, availability of resources, and affordability – focusing predominantly on business-to-business (B2B) firms, with examples from the manufacturing–retail supply chain, as well as an example from the energy utility sector. To achieve sustainability goals, collaboration with actors across the value chain is essential. Identifying stakeholders and potential collaborators is a first step toward positioning your organization as part of a circular economy. Firms must identify their position in the value chain and work out how they can best add value to it. Best practices for moving forward include: (re)finding your purpose, joint investments, strategic partnerships (involving knowledge sharing), and negotiating with retailers on value when price is non-negotiable.

Pages: 5

With the new influences of technology, we hope to see dramatic shifts in the direction of innovation from new raw materials, better market structures, green energy, optimized supply chain models, and changes in digital pricing models. This chapter has elaborated on the future changes in innovation and technology and their influence on pricing strategies. Artificial Intelligence (AI) can dramatically impact pricing, and, in fact, one of the top areas noted for disruption for AI is pricing. However, there is a risk of algorithms exacerbating racial and demographic bias in adjusting dynamic pricing models if left unchecked.

Pages: 24

No chapter abstract available.

Pages: 22

This section provides a summary of pricing strategies that can assist in maintaining a firm’s financial viability while aligning with its purpose. These are: (1) Unbundling (2) Bundling; (3) Reducing size; (4) The role of free; (5) Changing the monetization model; (6) Target costing; and (7) Green premium. Real-world case studies are presented to exemplify these strategies, including Apple, Amazon, Coca-Cola, Georgia-Pacific, Walmart and others. Also discussed within these strategies are the unintended consequences of free parking, the subscription model as a template for healthcare insurance, just-in-time manufacturing, and the challenges facing a large manufacturer of paper towels, which wants to become more sustainable. There is a focus throughout the chapter on the importance of pricing strategies in realizing a company’s “purpose” ambitions in the short and long term.