The Ecology Company: Optimization of Pricing Strategy

The Ecology Company: Optimization of Pricing Strategy

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Abstract

The Soviet Union left behind the unfinished development of innovative products and technologies. One of those technologies was production of highly efficient humates—a special agricultural additive to improve the efficiency of planting and farming. The technology was used, refined and improved by the Ecology Company, a Russian research-and manufacturing company. Humates had been known for a long time and were relatively widespread. Compared to competitors’ products, the Ecology Company’s humates were more effective and universal according to a number of indices. At the same time its effective output received different feedback from various companies and types of industry. Some set high value on it, some low. The company leaders wondered if it was possible to use this circumstance for optimizing their pricing strategy.

The company’s prevalent pricing policy implied that all customers paid the same price for the company’s products, and price dispersion for different groups of clients would exist only in case of discounts for bulk purchases. Was the company capable of implementing the elements for differentiated pricing in the competitive market with a basic commodity?

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