Personal MBA: Price Uncertainty Principle

Personal MBA: Price Uncertainty Principle

In this section, Kaufman states, “One of the most fascinating parts of Sales is what I call the Pricing Uncertainty Principle: all prices are arbitrary and malleable. Pricing is always an executive decision.” I’m not sure I agree with this statement. You may be able to ask any price for your goods or services, but you won’t be in business for long if you disregard the reality of the marketplace. According to Ludwig Von Mises, “Prices are a market phenomenon. They are generated by the market process and are the pith of the market economy. There is no such thing as prices outside the market. Prices cannot be constructed synthetically, as it were.”

Maybe I’m misunderstanding Kaufman here, maybe he’s just saying that you have to be able to justify whatever you price you set. I am sure, however, that prices cannot be set arbitrarily without either being misinformed or dishonest.

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