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Smart Pricing: How Google, Priceline, and Leading Businesses Use Pricing Innovation for Profitability by Z. John Zhang, Jagmohan Raju

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7. Subscribe and Save: Pricing for Marketing Profitability

“Pennywise, pound-foolish.”Old English adage

Every week, most of us walk out of the supermarket pushing a cart that contains almost the same things we bought the week before—breakfast cereals, coffee, bread, and dish soap. Supermarkets post the prices for each item they carry, and we pay the posted price for every item we purchase, usually without a second thought. When we get home, we may find that a magazine has come in the mail: Although we might buy the magazine on the newsstand, we choose instead to pay an annual or semiannual fee for the convenience of having our publications arrive like clockwork every day or week or month.

This seems normal to us, almost part of the natural order. ...

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