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Pricing Done Right: The Pricing Framework Proven Successful by the World's Most Profitable Companies

ISBN: 978-1-119-26989-2
208 pages
June 2016
Pricing Done Right: The Pricing Framework Proven Successful by the World

Description

Practical guidance and a fresh approach for more accurate value-based pricing

Pricing Done Right provides a cutting-edge framework for value-based pricing and clear guidance on ideation, implementation, and execution. More action plan than primer, this book introduces a holistic strategy for ensuring on-target pricing by shifting the conversation from 'What is value-based pricing?' to 'How can we ensure that our pricing reflects our goals?' You'll learn to identify the decisions that must be managed, how to manage them, and who should make them, as illustrated by real-world case studies. The key success factor is to build a pricing organization within your organization; this reveals the relationships between pricing decisions, how they affect each other, and what the ultimate effects might be. With this deep-level insight, you are better able to decide where your organization needs to go.  

Pricing needs to be done right, and pricing decisions have to be made—but are you sure that you're leaving these decisions to the right people? Few managers are confident that their prices accurately reflect the cost and value of their product, and this uncertainty leaves money on the table. This book provides a practical template for better pricing strategies, methods, roles, and decisions, with a concrete roadmap through execution.

  • Identify the right questions for pricing analyses
  • Improve your pricing strategy and decision making process
  • Understand roles, accountability, and value-based pricing
  • Restructure perspectives to help pricing reflect your organization's goals

The critical link between pricing and corporate strategy must be reflected in the decision making process. Pricing Done Right provides the blueprint for more accurate pricing, with expert guidance throughout the change process.

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Table of Contents

Preface

Acknowledgments

Chapter 1: The Value-Based Pricing Framework for Getting Pricing Done Right

Embedding the Culture of Value-based Pricing

Overarching Pricing Decision Areas

Analytical Routines

Decision Teams

Chapter 2: Value-Based Pricing

The Purpose of Firms: Serve Customer Needs Profitably

Value Engineering

Value-Based Pricing

Differential Benefits

Differential Price

Exchange Value to Customer

Design Costs against Price to Profit

References

Chapter 3: Business Strategy Alignment

Business Strategy

Customers

Competitors

Company

References

Chapter 4: Pricing Strategy

Price Positioning

Price Segmentation

Competitive Price Reaction Strategy

Pricing Capability

References

Chapter 5: Price Management

Market Pricing

Price Variance Policy

Price Execution

Pricing Analysis

Chapter 6: Defining the Pricing Decision Team

Marketing

Sales

Finance

Pricing

References

Chapter 7: Pricing Continuous Improvement and Analytics

Continuous Improvement Process

Offering Innovation and Pricing Decisions

Price Variance Policy Continuous Improvement

Market Pricing Continuous Improvement

References

Chapter 8: Organizational Design of the Pricing Specialist Function

Pricing Community Distribution

Pricing Reporting Structure

Pricing Talent

References

Chapter 9: A Decision You Control

References

Appendix A: Economic Origins of Competitive Advantage

Appendix B

Getting Pricing Done with Jesse Finch Gnehm of GE Oil & Gas

The Value-Based Pricing Journey

Context of Subsea Systems within GE

Pricing Community Cultivation

Focal Contributions of the Pricing Experts

Pricing Framework

Pricing Analysis Techniques

Price Automation and Analytical Tools

External Resources

Appendix C

Getting Pricing Done with Robert Smith of Eastman Chemical Company

Pricing Organizational Design

Pricing Mission

Pricing Functional Architecture

About the Author

Index

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Author Information

TIM J. SMITH, PHD, is the founder and CEO of Wiglaf Pricing, where he helps executives manage price better. Also an adjunct professor of marketing at DePaul University, he began his career as a research scientist in quantum mechanics before pursuing business strategy. He is the author of Pricing Strategy and Hawks, Seagulls, and Mice.

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