Another example might illustrate the difference better: When Steve Jobs returned to Apple he found extremely diverse product offerings intended to offer solutions optimized for features and cost to all segments of the small computer market. Unfortunately this resulted in a confusing mess that even he was unable to navigate. Which Mac should someone buy? Even Steve Jobs could not figure that out, and that is a sign of a serious problem.
The result was a mass consolidation of products. For a time there were high and low end versions of portable and desktop computers and that was it. Deciding between a Mac and a Mac Pro was not confusing or difficult, and this approach worked well with the core values of Apple. The goal of the company was to make computing highly available with systems that Just Worked in predictable and reliable ways. Structuring offerings and price options to make buying decisions easy for people who just wanted a computer caused an immediate boost to both sales and customer satisfaction.
So price optimization can mean very different things. In this case what seemed to be a straightforward targeting of market segments resulted in customer confusion that held back both sales and customer satisfaction. The solution involved a product packaging and pricing strategy that was more aligned with the goals of the company rather than tuning prices to reflect the diversity of the customer base. For best results pricing strategies must be integrated with company goals and messaging.
The result was a mass consolidation of products. For a time there were high and low end versions of portable and desktop computers and that was it. Deciding between a Mac and a Mac Pro was not confusing or difficult, and this approach worked well with the core values of Apple. The goal of the company was to make computing highly available with systems that Just Worked in predictable and reliable ways. Structuring offerings and price options to make buying decisions easy for people who just wanted a computer caused an immediate boost to both sales and customer satisfaction.
So price optimization can mean very different things. In this case what seemed to be a straightforward targeting of market segments resulted in customer confusion that held back both sales and customer satisfaction. The solution involved a product packaging and pricing strategy that was more aligned with the goals of the company rather than tuning prices to reflect the diversity of the customer base. For best results pricing strategies must be integrated with company goals and messaging.