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Pricing on Purpose: Creating and Capturing Value

Pricing on Purpose: Creating and Capturing Value

Ronald J. Baker

ISBN: 978-1-119-20136-6 August 2015 400 Pages

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—Reed Holden, founder, Holden Advisors Corp., coauthor, The Strategy and Tactics of Pricing: A Guide to Profitable Decision Making, Third Edition

"With Pricing on Purpose, Ron Baker had made an enormous contribution to the better understanding of pricing that will be accessible to anyone who wants to learn. People are intrigued by instances of what they see as idiosyncratic pricing. Sometimes it is idiosyncratic, but oft-times it is fiendishly clever and well researched. So is this book. There are examples that at first sight seem to have nothing to do with the subject at hand, but the learning points are all made and explained in any number of interesting and memorable ways. Pricing on Purpose is a welcome and valuable addition to the learning on pricing and I recommend it to professional pricers, marketers, and anyone interested in capturing the value their business creates."
—Eric G. Mitchell, President, Professional Pricing Society,

"Ron Baker is what I'd call a 'thought giant.' In his first two books he literally began a revolution in the accounting and legal professions. Thousands of professionals in public practice now lead far better, more rewarding lives thanks to him. Now he's broadened his impact in a huge way. Read this book, implement the ideas and you'll never look at your prices or your pricing policies in the same way again. You'll be richer in many ways because of it."
—Paul Dunn, founder and CEO, ResultsNet Australia, coauthor, The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services,

"As a reader of hundreds of business books, I am thrilled when I come across one that has something new to say. Pricing on Purpose does just that. Instead of presenting a set of feel-good items to check off a list, Ron Baker encourages us 'to think with him, not like him.' He methodically builds his argument leading us through the labyrinth of pricing theory and encourages us to look at pricing as the strategic tool that it is rather than taking the lazy cost-based tactical approach of most businesses. To paraphrase Karl Marx in terms of Baker's book, 'Cost-based pricing is the opium of business.'"
—Ed Kless, Director, Partner Development and Recruitment, Sage Software

"Baker has done it again! Building on the core principles that he advanced in Professional's Guide to Value Pricing and The Firm of the Future, Ron Baker has again evolved thought leadership on the critical dynamics of value and pricing. Baker's latest work, Pricing on Purpose: Creating and Capturing Value, provides real-world examples and practical strategies that provide a framework for pricing optimization. His clarity of purpose and passionate call to action resonates in today's intellectual capital economy."
—Thomas Finneran, Executive Vice President, American Association of Advertising Agencies

"We love this book! With detailed research, thorough references, and recommendations for further reading, this could be considered a textbook. That it is so readable and engaging is a triumph. The chapter providing the epitaph for cost-plus pricing is worth many times the price of this book. 'Got price-sensitive customers? Wonder why? Read and stop weeping. Who's in charge of value in your company?' Baker asks. If you can't immediately answer, you'd better read this book. Bravo, Baker!"
—Paul O'Byrne and Paul Kennedy, partners, O'Byrne and Kennedy LLP, Chartered Accountants, United Kingdom,

"Ron Baker is nothing short of brilliant, and his enthusiasm for pricing is contagious. Pricing on Purpose will add more value to your firm than anything else you could do. As usual in Ron's books, he presents cutting-edge ideas. There is no greater value to your company than to read Pricing on Purpose and implement its ideas."
—Scott Abbott, entrepreneur, former regional business development, manager, BDO Dunwoody, LLP, Manitoba, Canada



About the Author.

1. Why Is Movie Theater Popcorn So Expensive?

2. Why Are We in Business?

3. Mind Over Matter.

4. The Old Business Equation.

5. The New Business Equation.

6. Ninety-Nine-Cent Pricing, Engagement Rings, and the Assumption of Rationality.

7. The Invisible Hand: No One Person Knows How to Make a Pencil.

8. ATale of Two Theories.

9. Cost-Plus Pricing’s Epitaph.

10. The Wrong Mistakes.

11. Price-Led Costing Replaces Cost Accounting.

12. What and How People Buy.

13. The Value Proposition.

14. The Consumer Surplus and Price Discrimination.

15. Customer Segmentation Strategies.

16. Price Discrimination in Practice.

17. There Is No Such Thing as a Commodity.

18. Baker’s Law: Bad Customers Drive Out Good Customers.

19. Ethics, Fairness, and Pricing.

20. Antitrust Law.

21. Who Is in Charge of Value?

22. Pricing on Purpose: Getting Paid for the Value Your Company Creates.


Suggested Reading.


Pricing probably has a more direct impact on profitability than most other factors, yet little authoritative information has been published about it and companies adopt various approaches, not all geared to getting the most for their products or services. This unique book advocates a practical, purposeful, profitable approach to pricing.
  • Focuses exclusively on the art of pricing, and emphasizes the value to the customer.
  • Discusses topics such as what and how people buy, the value proposition, the fallacy of commodity thinking, and the labor versus the subjective theories of value
  • Includes examples of the 5 Cs of value (comprehend, create, communicate, convince, and capture),
  • Includes real-life examples from a multitude of industries and well-known entrepreneurs.