A variance in accounting terminology is the difference between an expected value and an actual value.

It is important for a company to look at variances in their processes and conduct variance investigation and analysis to see why the variance occured.  If the variance is positive the company can then note why it was positive and try and repeat that action.  If the variance is negative the company can see why it was negative and try and correct their mistake(s).

Market-skimming pricing is a pricing strategy used by companies to “skim” revenues layer by layer from the market.  This strategy is used by companies that have new and usually innovative products.  A company pursuing this strategy will set a high initial price for the product to maximize their revenues off of customers who are willing to pay a higher price for something new.

For example, think back to when DVD players were first introduced, or when new TVs come out.  At first they are priced very high, but over time their price comes down.  These companies are pursuing the market-skimming pricing strategy, they are maximizing their revenues from customers who are willing to pay more money to have it early and then lowering their price later to attract new customers.

A market-skimming pricing strategy is only effective if the product’s image and quality warrant the product to have that high of price.  There must also be enough consumers willing to pay that price.  The company must make sure that a competitor cannot easily enter the market and undercut the price of the product.  If the company will operate at a loss due to fixed costs and selling at a smaller volume a market-skimming pricing strategy is not the strategy the company should pursue.

Last year I subscribed to Fool.com (don’t go running there just yet) to test out their advice. Mind you this was just to give a review on this site to save our viewers money. I was pleased with the look of the site to begin with, it looked up to date and that these people might actually know what they are doing. I was no farther from the truth in that moment.

Fool.com is simply a site that tries to sell you their newsletter and gives you more run-of-the-mill crap. They tell you dividend stocks are the greatest and Cramer caused the stock prices shooting down when he emailed his users to get out of the market in October.  The market was poised to burst way before that. Fool uses the strategy: Pound your competition down to make yourself look good. Dont let them fool you; look at their comments to each post they have. They are not haters, it is for real.

The 4 Cs are another way for marketers to look at the marketing mix.  The  four Cs look at the marketing mix from the customer’s perspective.  The 4Cs are Customer solution, Customer cost, Convenience, and Communication.  Building the marketing strategy from the customer’s point of view is very beneficial.  Thinking like the customer helps you design your makreting mix not around the question, “How can I push this product?”, but instead “What makes people like this product?”