Setting Profitable Prices, + Website

Time-tested strategies for making the best possible pricing decisions and gaining an unbeatable competitive advantagePricing is one of the most important--and difficult--marketing problems companies face when launching new products. Unfortunately, the research that goes into making optimal pricing decisions is a very time-consuming process--unless, that is, you can afford to pay a consultant or outside agency to do it for you. But if you're like most small- to medium-sized business owners and managers, time and money are two things you absolutely don't have to spare. Problem solved: Written by a nationally recognized pricing expert, this book arms you with proven strategies for guaranteeing that you'll never again leave money on the table when determining prices. And you'll spend the least possible time setting your more profitable prices.* Packed with valuable worksheets and other valuable tools to help guide your research and your pricing decision-making* A goldmine of expert tips for pricing in any specialty market, it offers a highly effective way to market your company's product more effectively and profitably* Shows you how to avoid making your competitors' pricing mistakes and gain a powerful competitive edge in the process* The author uses examples drawn from her years of consulting work with companies large and small, including Food Network, American Express Publishing, and Playboy

Preface xvAuthor Credentials xvIf You Can Afford a Pricing Consultant . . . xviDon't Have the Cash to Invest? xviiHow Big of a Rush Are You In? xviiChapter Summaries xviiiAcknowledgments xxiPART 1 HOW TO SET PRICES FOR MAXIMUM PROFITS 1Chapter 1 Why Pricing Is the Key to Your Success 3Raise Prices--or Sell More Products? 3Big-Company Case History 5Tiny-Company Case History 5Chapter 2 Why Most Companies Stink at Pricing (and How You Can Do Better!) 7The "Myth" of Creating Demand Curves 8How Your Competitors Are Setting Prices 9Cost-Plus Pricing 9Match-Your-Competitors Pricing 11PART 2 HOW THE MARKET WILL VALUE YOUR NEW PRODUCT 13Chapter 3 Analyzing Your Competitors' Prices 15You Do So Have Competitors! 15How to "Pick" Your Competitors 16Direct vs. Indirect Competitors 16How Consumers Evaluate Prices 18How to Get Profitable Ideas from Your Competitors 19Chapter 4 Environmental Factors That Can Affect Your Pricing 21Environmental Factors Overview 21The Economy 21Competitors 24Government Regulation and Legal 24Social Trends 25Technological Change 26Chapter 5 Pick the Positioning of Your New Product 29There Are Only 3 Choices! 29The Psychology of Price Positioning 30Penetration Price Positioning 31Skimming (or Premium) Price Positioning 35Competitive Price Positioning 38Learning More about Competitive Pricing 40Chapter 6 Analyzing Your Buyer Benefits/Drawbacks Relative to Your Competitors 43Uncovering What Buyers Really Value/Hate about Products in Your Marketplace 44Learn More about Calculating Buyer Valuation of Different Features 44Chapter 7 Picking a "Ballpark" for Your Best Price 47You Will Not Be "Stuck" with Your Decision! 48Can't Make a Profit at that Price Range? 49Not Sure about Your Results? 49Learn More about Buyers' Reactions to Price Ranges 50PART 3 YOUR COST ANALYSIS 53Chapter 8 Evaluating Your Costs 55The Ideas Behind "Target Costing" and "Target Engineering" 55Types of Costs 56The Hardest Part of Calculating Costs 57Reasons for Launching a Product that Doesn't Cover Overhead 58PART 4 FINE-TUNING YOUR PRICE 59Chapter 9 Is Your Profit Potential Acceptable? 61If You're Happy with Your Potential Profits 61If You're Not Happy with Your Potential Profits 62Next Step 66Chapter 10 Psychological Adjustments to Your Price 67Understanding "Barriers" in Prices 68Staying below Barriers 68Increasing Prices up to Barriers 69Numbers that Say "Discount" to Buyers 70Test Your Knowledge! 71Visually Appealing Prices 72Selling to Businesses 73Learn More about Thresholds 74Learn More about the Effect of Numbers 75PART 5 TESTING YOUR PRICES 77Chapter 11 Testing Prices 79The Psychology of You--in Setting Prices 79Can You Test? 81The Difference between Testing and Research 81Chapter 12 Using Google to Test Prices for Free (or Almost Free) 83Two Methods for Almost-Free Testing!! 83Using Google Optimizer to Test Multiple Things 87PART 6 PRICING IN SPECIAL SITUATIONS 91Chapter 13 Pricing Services 93Imagine No Chapter 13! 93The Complications of Setting Prices for Services 94The Myth of Pricing Based on "What You Want to Earn" 94Pricing by the Hours versus the Job 94Finding What Service Competitors Charge 96Picking Your Price Positioning 97What Your Price Says about Your Firm 97How to Charge Higher Prices to Those Willing to Pay More 98Chapter 14 Pricing New Products/Services, Part 1: When Your Brand Is Unknown 101The Problems in Pricing Something New 101Price Equals Quality Buyer Perception 102Does Quality Equal Likelihood-to-Buy? 102Understanding "Bargain Hunters" 103Price Preferences by Product Type 103Detailed Research on Buyer Price Position Preferences 104Additional Research on Preferred Prices 107Learn More about Risk and Pricing 110Chapter 15 Pricing New Products/Services, Part 2: Competing with Established Brands 113When Your Competitors Are Established Brands 113Risk Avoidance 116Price Premiums for Known Brands 117Discounting Differences 120What Causes Customers to Switch to a New Brand? 124What Happens after Buyers Switch? 126Shocking Findings on Brand Names 127So What Does it All Mean for Pricing a New Product/Service? 127Chapter 16 Pricing with Discounts 129Discounts: A Double-Edged Sword 129When Discounts Worry Consumers 130Determining Best Discount Levels 136Discounts' Effect on Quality Ratings and Purchase 137Concluding Thoughts on Pricing, and Especially on Testing Prices 139Appendix of Worksheets 141Bibliography 157About the Author 171About the Companion Web Site 173Index 175