Pricing. Local, National, Global price lists
Salaries in El Paso, Texas are ½ than in New York. Should we sell at a lower price in El Paso?
This second article on the topic of Inflation and Pricing is part of the graduate class I teach at NYU (New York University), the How to Make Money, and the Global, Profitable & Ethical series. The article is interactive. You will be able to respond to questions, see responses in real-time from others and share your comments with a community of company executives, managers, business owners, and students.
Local, National, or Global price-lists?
Data published by Robert Half, a recruiter, shows that a Digital Strategist makes $89,250 in the United States. However, in New York, they make 41% more, or $125,936. Meanwhile, in El Paso, Texas, they make 28% less, or $64,260. Someone making $64,000 makes roughly ½ than someone making $126,000.
L’Oréal’s national price list
In Hoboken, New Jersey, 5 miles from NYC, per capita income is $86,000. In El Paso, Texas is $22,000. The poverty level is 9% in Hoboken and more than twice that in El Paso. A product sold by L’Oréal through Walmart is sold at the exact same price across the US. That is called a “National price list”. What would you have done if you were an executive at L’Oréal or Walmart?
McDonald’s local price list
The cost of a Big Mac in El Paso, Texas, is 4.89. In Hoboken, New Jersey, close to New York City and where the per capita income is four times higher the price is $7.49, or 54% higher. That is called a Local price list.
Apple’s global price list
Apple sells the iPhone at about the same price around the world. There are small differences, but they don’t fully compensate for differences in taxes, VAT up to 22% in some European countries, and duties. In other words, Apple “assumes the loss” to sell at about the same price.
Local, National, or Global price lists?
Do you own your business? Are you an executive at a company participating in pricing decisions? Starting your own businesses? One of my students? What would you do? Would you use a local, national, or global price list?
Should we sell at a lower price in El Paso? To respond, click here or scan the QR code below. Your response is updated in real-time.
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Next, we are going to discuss The impact of Pricing. Would you rather increase prices by 4% or fire 50% of the team? Follow me to get my content.
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This article appears also in Chapter 1 of my book “How to Make Money” available on Amazon. Proceeds go to donate copies to foster financial education.