Geographical differences may not be significant
“Our market is different”. “New York is more competitive”. “The west coast is more competitive”. Statements like these are heard in most national or international businesses. Most people within the companies generally believe the statements are true, and they may indeed be true. But if such statements are just folklore and don’t really represent pricing behavior, accepting those statements as truth simply enables sloppy pricing.
At Strategic Pricing Solutions, we believe it is important to test and validate things before acting on them. In Figure 4, red dots represent low territory prices, yellow represent average, and green represent high territory prices for a real company. The locations with low prices do not appear to be the locations typically referred to as the most competitive. They may simply represent undisciplined pricing behavior by a few sales representatives. We can help you determine if your perceived geographic differences are driven by market forces or by undisciplined pricing.