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192 pages

English

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"Pricing the Profitable Sale: The Manager’s Guide To Value Pricing presents an entirely new approach to the pricing of goods and services. For the first time the guesswork is taken away from pricing and the marketer presented with twenty-two practical pricing guidelines and rules of thumb which he or she can use over and over again to reach important pricing decisions to either maximize sales revenue and market share or profit for any product or service on the market. The book was written for managers, including marketing, product, and sales managers, or any individuals with pricing responsibilities at their firms. It should also be of much interest to professors and students in a program leading to the MBA degree where it could serve as the main texts in a course on pricing or as a supplement to as standard marketing textbook.

Sujets

Economics

Business

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Publié par	Xlibris US
Date de parution	13 juin 2022
Nombre de lectures	0
EAN13	9781669823209
Langue	English
Poids de l'ouvrage	1 Mo

Informations légales : prix de location à la page 0,0400€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

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Pricing the Profitable Sale
The Manager’s Guide To Value Pricing

H. Peter Zell

Copyright © 2022 by H. Peter Zell.
Library of Congress Control Number:
2022908307
ISBN:
Hardcover
978-1-6698-2322-3

Softcover
978-1-6698-2321-6

eBook
978-1-6698-2320-9

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the copyright owner.

Rev. date: 10/20/2022

Xlibris
844-714-8691
www.Xlibris.com
842236

The single most important decision in evaluating a
business is pricing power. If you’ve got the power
to raise prices without losing business to a competitor
you’ve got a very good business. And if you have to
have a prayer session before raising the price by 10
per cent, then you’ve got a terrible business. 1
Warren E. Buffett
Contents
Preface
Notes
1. The Art and Science of Pricing
1.1 The Role of Price in the Economy
1.2 Price as a Marketing Strategy Variable
1.3 The Uniqueness of Price
1.4 Pricing as Art and Science
1.5 Pricing Objectives
1.6 Pricing Methods
Notes
2. Cost-Plus Pricing
2.1 The Method
2.2 Overhead Allocation
2.3 Application
2.4. The Case Against Cost-Plus Pricing
2.5 Why “Cost-Plus” Remains Popular
Notes
3. Cost and Contribution
3.1 The Nature and Origin of Costs
3.1.1 Direct Costs
3.1.2 Indirect Fixed (Common) Costs
3.2 The Basic Formulas
3.3 How Important is Cost in Pricing?
3.4 Contribution
3.5 Contribution or Profit?
3.6 Pricing Guidelines (I)
Notes
4. Break-Even Analysis
4.1 The Concept
4.2 The Break-Even Formulas
4.3 Application
4.3.1 Break-Even Chart Solution
4.3.2 Formula Solution
4.4 Break-Even vs. the Unit Contribution Margin
Notes
5. Contribution Analysis
5.1 The Contribution Income Statement
5.2 Profitability Analysis
5.3 Contribution Pricing
5.4 Establishing Price Limits
5.5 Pricing Guidelines (II)
Notes
6. Market Demand
6.1 Marketing Terms
6.2 The Law of Demand
6.3 The Price Elasticity of Demand
6.3.1 The P.E.D. Formulas
6.3.2 Sales Revenue and the P.E.D.
6.3.3 The Demand Curve and the P.E.D.
6.4 Pricing Guidelines (III)
6.5 Price Sensitivity Estimation
6.5.1 Research Techniques
6.5.2 Internet Data
6.5.3 Internal Company Data
6.6 The Price Cross-Elasticity of Demand
Notes
7. Isoprofit Analysis
7.1 Background
7.2 The Rationale Behind the Technique
7.3 The Isoprofit Formulas
7.4 Reference Tables
7.4.1 Required and Allowable Volume Changes
7.4.2 Required and Allowable P.E.D.s
7.5 Graphical Analysis
7.6 Pricing Guidelines (I V)
7.7 Application
7.8 Implementing Price Changes
Notes
8. Pricing Strategies
8.1 General Pricing Strategies
8.1.1 Skim Pricing
8.1.2 Penetration Pricing
8.1.3 Neutral Pricing
8.2 Life Cycle Strategies
8.2.1 The Introduction Stage
8.2.2 The Growth Stage
8.2.3 The Maturity Stage
8.2.4 The Decline Stage
8.2.5 PLC Summary
8.3 Industry Structure and Pricing Strategy
8.3.1 Perfect Competition
8.3.2 Pure Monopoly
8.3.3 Monopolistic Competition
8.3.4 Oligopoly
8.4 Leadership Pricing
8.5 Pricing Strategies with Cost Economies
8.6 Combination Strategies
8.7 Yield Management
8.8 Competitive Bid Pricing
Notes
9. Value Pricing
9.1 Customers and the Perception of Value
9.1.1 Value Assessment
9.1.2 Value Creation
9.1.3 Value Communication
9.1.4 Value Recoupment
9.2 Psychological Aspects of Pricing
9.3 Setting an Initial Price
9.4 Multiple Products Pricing
9.5 Pricing Practices and Techniques
9.5.1 Price Bundling and Unbundling
9.5.2 Private Label and Store Brands
9.5.3 Price Lining
9.5.4 Odd Pricing
9.5.5 Raising the Price Without Overtly Doing So
Notes
10. Marketing and Pricing Dynamics
10.1 Market Segmentation
10.2 Target Markets
10.3 Versioning and Price Customization
10.3.1 Customizing for Maximum Revenue
10.3.2 Customizing for Maximum Contribution
10.4 “Raising the Flagpole” (RTF)
10.5 Pricing Guidelines (V)
10.6 RTF Implementation
10.6.1 Product Differentiation
10.6.2 Market Segmentation
10.6.3 Product Innovation
10.6.4 Patents and Trademarks
10.6.5 Branding
10.6.6 Advertising and Sales Promotion
Notes
11. Price Competition
11.1 The Profit Impact of a Price Reduction
11.2 Price Reduction to Retain Market Share
11.3 Temporary Price Reductions
11.3.1 General Price Promotions
11.3.2 Coupon Sales
11.4 Price Wars
11.4.1 Major Historical Conflicts
11.4.2 Preventing and Containing Price Wars
11.5 Market Share and Profitability
11.5.1 The PIMS Project and Its Implications
11.5.2 Issue Resolution by Graphical Analysis
11.6 Pricing Guidelines (VI)
11.7 Profit-Enhancing Measures
11.7.1 Managing the Pocket Price Waterfall
11.7.2 Dealing with Power Buyers
11.7.3 Ad Hoc Pricing
11.7.4 Sales Force Compensation
11.8 Marketing Intelligence
Notes
12. Price Optimization
12.1 Price Optimization and the P.E.D.
12.2 Price Optimization Techniques
12.2.1 General Pricing Rule of Thumb (1)
12.2.2 Linear Demand Curve
12.2.3 Incremental Search
12.2.4 Graphical
12.2.5 Formula
12.3 Application
12.3.1 General Pricing Rule of Thumb (1)
12.3.2 Linear Demand Curve
12.3.3 Incremental Search
12.3.4 Graphical
12.3.5 Formula
12.3.6 Recommendation
12.4 A Special Note
Notes
13. Pricing for Maximum Revenue
13.1 The Revenue Maximizer Formulas
13.1.1 The Revenue Impact Formula (RIF)
13.1.2 Revenue after a Percentage Price Change
13.1.3 The Optimal Percentage Price Change
13.1.4 The Optimal Condition
13.1.5 The Price Range for Positive Revenue Changes
13.1.6 The Optimal Price
13.1.7 The Revenue Price Range
13.1.8 The Optimal Percentage Quantity Change
13.1.9 The Optimal Quantity
13.1.10 The Maximum Revenue Change
13.1.11 The Maximum Revenue
13.1.12 The Optimal Unit Contribution Margin
13.2 The Normalized Formulas
13.3 Reference Tables
13.4 Application
13.4.1 Formula Solution
13.4.2 Reference Table Solution
13.4.3 Graphical Solution
13.4.4 Conclusion
13.5 Pricing Guidelines (VII)
Notes
14. Pricing for Maximum Profit
14.1 The Profit Maximizer Formulas
14.1.1 The Contribution (Profit) Impact Formula (PIF)
14.1.2 The Contribution after a Percentage Price Change
14.1.3 The Optimal Percentage Price Change
14.1.4 The Optimal Condition
14.1.5 The Price Range for Positive Contribution Changes
14.1.6 The Optimal Price
14.1.7 The Total Contribution Price Range
14.1.8 The Optimal Percentage Quantity Change
14.1.9 The Optimal Quantity
14.1.10 The Maximum Total Contribution Change
14.1.11 The Maximum Total Contribution
14.1.12 The Optimal Unit Contribution Margin
14.1.13 The Optimal Sales Revenue
14.1.14 The Optimal Price Elasticity of Demand
14.1.15 A Comparison of Optimal Prices
14.2 The Normalized Formulas
14.3 Reference Tables
14.4 Application
14.4.1 Formula Solution
14.4.2 Reference Table Solution
14.4.3 Graphical Solution
14.4.4 Conclusion
14.5 Sales Volume vs. Total Contribution
14.6 Pricing Guidelines (VIII)
14.7 Concluding Comments
Notes
15. Pricing and the Law
15.1 An Overview
15.2 A Sampling of Antitrust Cases in the Media
15.3 U.S. Antitrust Enforcement
15.4 Monopolies and Monopolizing
15.4.1 The Sherman Act
15.4.2 The Clayton Act
15.4.3 The Stare Decisis Doctrine
15.4.4 Antitrust Injury and Standing
15.4.5 Judicial Antitrust Standards
15.4.6 Monopolizing and Market Power
15.5 Restraints of Trade
15.5.1 Horizontal Restraints of Trade
15.5.2 Vertical Restraints of Trade
15.5.3 Predatory Pricing
15.6 Communications Among Competitors
15.6.1 Conscious Parallelism
15.6.2 Price Signaling
15.7 Price Discrimination
15.7.1 The Robinson-Patman Act
15.7.2 Elements of a Prima Facie Case
15.7.3 Defenses
15.8 European Union Antitrust Law
15.9 Managers and the Law
15.10 Ethics in Pricing
Notes

Appendix

I. Formula Derivations
II. Hypothetical Case Studies
A. Revenue Maximization : The Metropolitan Transit Authority - Midwest (MTA)
B. Profit Maximization: Fritzel’s Restaurant

Bibliography
Preface
Price too high and you lose the sale! Price too low and you can’t make money! 2
A round the clock and around the world thousands upon thousands of sales transactions are being consummated between sellers and buyers. For each of the many diverse products and services offered the seller must first set a price and state the terms of sale to which the