Practical Pricing for Results

Overview

This book provides entrepreneurs with a practical guide on how to set and manage the pricing of both the products and services that they offer. It outlines the process of deriving a pricing strategy first, and then monitoring the profit implications of any pricing decisions made.

In a logical, sequential format, the author sets out basic financial tools such as the Profit and Loss Account, and explains how best to understand and negotiate within the business to business and business to consumer markets. In a climate of market instability, the book is a timely examination of pricing as an essential practical discipline in the business world.

Content

ONE: AN OVERVIEW OF THE PRICING PROCESS

• Preparing the ground
• Who takes the overall responsibility for price in our firm?
• What is the firm’s cost structure and policy, re. overhead allocation?
• The firm’s marketplace

TWO: THE FOUNDATIONS OF THE PRICING DECISION

• Strategic focus
• The effectiveness efficiency grid
  
• Market forces
  
• Oversupply brings the danger of commodity trading
  
• Surviving oversupply
  
• The marketing concept
  
• Introducing the product life cycle [PLC]
  
• Strategic focus and the product life cycle
  
• Price skimming
  
• Barrier pricing
  
• Price and the technology adoption curve (TAC)

THREE: HOW OTHERS PRICE

• The current situation?
• How does cost plus work?
• Activity based costing

FOUR: PRICE POSITIONING AND STRATEGIES

• Synopsis
• Where it all begins
• Segmenting for price
• The conditions
• The segmentation process
• Segmenting via B2B buyer behaviour
• Finally you need to know
• What constitutes price to your ‘target group’?
• General segmentation principles
• Price positioning
• The price landscape
• Price as an indicator of quality
• Objectives for pricing and pricing strategies
• Some useful marketing pricing strategies
• The profit centre?

FIVE: VALUE-BASED PRICING

• Two Cases: ‘Value-Based Pricing’
• The Heart of Value-Based Pricing
• The Value-Based Pricing process of analysis
• Some ways to add value for the customer
• Selling the ‘value-add’ to the customer
• Some approaches to discover ways to add value for your customers
• Exhibit: Simplified example of a conjoint analysis ‘data capture’

SIX: PRICING TACTICS – DEALING WITH THE DAY TO DAY PRESSURES ON PRICE

• Pricing a tender

SEVEN: PRICE WARS – ANTICIPATING/PREVENTING/FIGHTING THEM (BUT ONLY IF YOU HAVE TO)

• An example price war
• LESSON?
• Dealing with extreme competition
• Key issues, re price wars etc.
• Why price wars must be avoided
• Know from where to expect the threat
• Characteristics of strong vs. weak rivals
• ‘Good’ vs. ‘dangerous’ competitors
• Root causes of price wars

EIGHT: THE ART OF PRICE NEGOTIATION

• Co-operative versus adverserial negotiation
• Price negotiation
• Issues when preparing to negotiate
• Analysis of potential trading chips/concessions
• Checklist for assessing buyers likely needs, strategies and tactics
• Discuss
• Decision-makers who make good partners
• Decision-makers who make difficult partners
• The language of negotiation
• Structure of the negotiating interview
• Defining the issues
• Refining the issues
• Propose

APPENDICIES

• Answers and discussions for the exercises
• The calculations for the pricing
• Main sources and recommended reading list

Author

Ian Ruskin-Brown

Ian Ruskin-Brown is a highly experienced marketing consultant. For many years he was a member of the Faculty of the Chartered Institute of Marketing, its training arm. Until recently he was a member of the IBM International Business School and he is currently part of the faculties of Management Centre Europe in Brussels, the Singapore Institute of Management [International] and IIRme based in Dubai.He is the author of Marketing your Service Business and Mastering Marketing now in its 2nd edition, both published by Thorogood.