Strategic Finance | When a higher price pays off

January 2011 I STRAT E G IC FI N ANC E 29 COVER STORY When a Higher Price Pays Off By Julie Lockhart, CMA; Audrey Taylor; Karl Thomas; Brenda Levetsovitis; and Jason Wise Especially now, the lowest-priced products often sell best. Yet higher-priced... More

January 2011 I STRAT E G IC FI N ANC E 29 COVER STORY When a Higher Price Pays Off By Julie Lockhart, CMA; Audrey Taylor; Karl Thomas; Brenda Levetsovitis; and Jason Wise Especially now, the lowest-priced products often sell best. Yet higher-priced products frequently have hidden benefits that keep maintenance and other costs low over the life cycle. As a matter of fact, in one case, a low sticker price could mean higher costs to business, the military, personal safety, and the environment. On the other hand, imagine spending $50,000— which appears to be a high sticker price—and saving $180,000 in just two years! The only real additional cost is what it would take to educate users on the advantages of reusing fuel rather than disposing of it. Less