Hermann Simon > Quotes

“What has changed in the meantime? Managers have become keenly aware that value alone does you little good unless you can communicate it successfully. That means that customers understand and appreciate what they are buying. Remember, the only fundamental driver of willingness to pay is the perceived value in the eyes of the customer.”
― Hermann Simon, Confessions of the Pricing Man: How Price Affects Everything

“Successful people in particular are susceptible to surges of anything-is-possible. They then plunge into new, seemingly attractive markets hoping to prove themselves to the world yet again. However, it is extremely rare that the same person achieves world championship or wins the Nobel Prize in two disciplines. Danger looms just around the corner if the new activity is too distracting and the core business is neglected.”
― Hermann Simon, Hidden Champions of the Twenty-First Century: The Success Strategies of Unknown World Market Leaders

“The decisive factor is to supply the customer with a clear advantage when compared with the competition. Such a “strategic” competitive advantage must fulfill three criteria: it must be 1. important for the customer;   2. actually perceived by the customer; and   3. sustainable/difficult to copy.   If, for example, the packaging of a product is unimportant for the customer, it is unsuitable as a competitive advantage. If a product has a particularly long life span, but the customer is not aware of this advantage or does not perceive it, this advantage cannot influence the customer’s decision to purchase and does not help the supplier. If a company ruins its margin by reducing a price, the low price advantage cannot be sustained.8 Simultaneous fulfillment of the three criteria “important, perceived, sustainable” is a significant challenge.”
― Hermann Simon, Hidden Champions of the Twenty-First Century: The Success Strategies of Unknown World Market Leaders

“market penetration quickly and ignite a contagion effect as positive feedback about the product spreads. Penetration is also the recommended strategy if there are strong experience curve effect s or economies of scale .”
― Hermann Simon, Confessions of the Pricing Man: How Price Affects Everything

“the customers’ willingness to pay . I recommend to consider unbundling under these conditions:”
― Hermann Simon, Confessions of the Pricing Man: How Price Affects Everything

“Pricing policy today is basically guess work,” he told me in the early 2000s. “What you are doing is pioneering work. And I think that it will be quite some time before any of the competitors catch on.”6 Shortly before his death in 2005, he provided a testimonial for Manage for Profit, not for Market Share, a book which I co-wrote with two colleagues: “Market share and profitability have to be balanced and profitability has often been neglected. This book is therefore a greatly needed correction.”
― Hermann Simon, Confessions of the Pricing Man: How Price Affects Everything