Contextual Pricing: The Death of List Price and the New Market Reality

Chapter 1

Context and the Death of List Price

Without a story, I cannot give you a price.The price of used furniture is a point of view.

—FROM THE PRICE, ARTHUR MILLER, 1968

Who killed list price? One of the prime suspects is called “competition.” Not a lone killer, however; it was a conspiracy. List price died because one price will never fit different customer comparison points, needs, budgets, timing, and applications. This observation builds upon Economics 101: that the value of one commodity at one time and location is not the same as the same commodity in another time and location.¹ Managers involved in price must insist that it reflect the major factors shaping and framing customer choice. Those factors are best labeled “context.”

Context ...