Clarkson University’s Larry Compeau co-chairs pricing strategy conference
A Clarkson University professor was recently co-chair of an international conference in Boston to discuss retail pricing strategies.
Larry D. Compeau, professor of consumer and organizational studies, was one of four co-chairs of the conference, which drew business leaders and academic researchers. The conference was cosponsored by Clarkson’s School of Business.“We had four executives responsible for pricing strategies from companies at the conference to talk about practice - what they do every day in terms of their pricing strategies,” Compeau said. Among those attending were executives from Staples, BJ’s Wholesale Club, Accenture and Kantar Retail.
“We also had a number of academics from all over the world presenting academic research, theoretical research on pricing strategies,” he said, “and showing how it applies to practitioners.”
Retail pricing research is important, Compeau said, because it helps retailers determine their overall market strategies for maximizing sales.
“It’s a vast field,” Compeau said. “Everything from whether or not to use the word ‘sale’ to how consumers interpret different prices in different contexts.” The research also covers long-term pricing strategies and how a company’s pricing strategy has to be consistent with its overall market position and market goal.
“I always like to know more about why consumers behave the way they do and it’s amazing the amount of information consumers get out of price,” he said.
Some people, he said, pay little or no attention to price, while others are “hyper-price-sensitive” and avid coupon-clippers. “Obviously, if you’re a retailer, what do you do, how do you manage your business so that you can bring both people in because you need them both,” he said.
For example, he said, “there’s a whole stream of research looking at odd pricing. How consumers use it, how they think of it and so forth.” For example, why would a retailer price an item at $6.87 instead of $6.90 or $6.85? “In part,” he said, “$6.87 sends a signal to consumers that you’re right down to the penny. You’re cutting your margins so close you’re right down to the penny.”
Compeau’s research focus involves what is known as reference price advertising, which involves a “regular” price and a “sale” price and how that affects consumers’ perception of a “deal.” He received his bachelor and master of science degrees from Clarkson and his Ph.D. from Virginia Tech.