01 November 2013
Setting Profitable Prices by Marlene Jensen
Setting Profitable Prices Setting Profitable Prices: A Step-by-step guide to pricing strategy without hiring a consultant by Marlene Jensen is a recent addition to our Small Business Help collection in the Business & IP Centre.
This book is a very useful guide to for business people who need help setting prices for their products. It gives practical guidance on pricing, with very specific details and step-by-step information on how to apply pricing to products.
" Setting Profitable Prices by Marlene Jensen is a very well–written book, easy to read, and contains demonstrative examples of how optimal pricing decisions are made by examining the consequences of various pricing approaches on financial and brand–specific outcomes. Grounded in years of research, the book provides a scientific and practical foundation for how pricing should be done, and is a highly useful resource for anyone involved in making pricing decisions." — Hooman Estelami , Professor of Marketing, Graduate School of Business, Fordham University
Table of Contents:
PART 1 HOW TO SET PRICES FOR MAXIMUM PROFITS
Chapter 1 Why Pricing Is the Key to Your Success
Chapter 2 Why Most Companies Stink at Pricing
(and How You Can Do Better!)
The “Myth” of Creating Demand Curves
How Your Competitors Are Setting Prices
HOW THE MARKET WILL VALUE YOUR NEW PRODUCT
Chapter 3 Analyzing Your Competitors’ Prices
You Do So Have Competitors!
How to “Pick” Your Competitors
Direct vs. Indirect Competitors
How Consumers Evaluate Prices
How to Get Profitable Ideas from Your Competitors
Chapter 4 Environmental Factors That Can Affect Your Pricing
Environmental Factors Overview
Government Regulation and Legal
Chapter 5 Pick the Positioning of Your New Product
There Are Only 3 Choices!
The Psychology of Price Positioning
Penetration Price Positioning
Skimming (or Premium) Price Positioning
Competitive Price Positioning
Learning More about Competitive Pricing
Chapter 6 Analyzing Your Buyer Benefits/Drawbacks Relative to Your Competitors
Uncovering What Buyers Really Value/Hate about Products in Your Marketplace
Learn More about Calculating Buyer Valuation of Different Features
Chapter 7 Picking a “Ballpark” for Your Best Price
You Will Not Be “Stuck” with Your Decision!
Can’t Make a Profit at that Price Range?
Not Sure about Your Results?
Learn More about Buyers’ Reactions to Price Ranges
PART 3 YOUR COST ANALYSIS
Chapter 8 Evaluating Your Costs
The Ideas Behind “Target Costing” and “Target Engineering”
Types of Costs
The Hardest Part of Calculating Costs
Reasons for Launching a Product that Doesn’t Cover Overhead
PART 4 FINE-TUNING YOUR PRICE
Chapter 9 Is Your Profit Potential Acceptable?
If You’re Happy with Your Potential Profits
If You’re Not Happy with Your Potential Profits
Next Step 66
Chapter 10 Psychological Adjustments to Your Price
Understanding “Barriers” in Prices
Staying below Barriers
Increasing Prices up to Barriers
Numbers that Say “Discount” to Buyers
Test Your Knowledge!
Visually Appealing Prices
Selling to Businesses
Learn More about Thresholds
Learn More about the Effect of Numbers
PART 5 TESTING YOUR PRICES
Chapter 11 Testing Prices
The Psychology of You—in Setting Prices
Can You Test?
The Difference between Testing and Research
Chapter 12 Using Google to Test Prices for Free (or Almost Free)
Two Methods for Almost-Free Testing!!
Using Google Optimizer to Test Multiple Things
PART 6 PRICING IN SPECIAL SITUATIONS
Chapter 13 Pricing Services
Imagine No Chapter 13!
The Complications of Setting Prices for Services
The Myth of Pricing Based on “What You Want to Earn”
Pricing by the Hours versus the Job
Finding What Service Competitors Charge
Picking Your Price Positioning
What Your Price Says about Your Firm
How to Charge Higher Prices to Those Willing to Pay More
Chapter 14 Pricing New Products/Services, Part 1: When Your Brand Is Unknown
The Problems in Pricing Something New
Price Equals Quality Buyer Perception
Does Quality Equal Likelihood-to-Buy?
Understanding “Bargain Hunters”
Price Preferences by Product Type
Detailed Research on Buyer Price Position Preferences
Additional Research on Preferred Prices
Learn More about Risk and Pricing
Chapter 15 Pricing New Products/Services, Part 2: Competing with Established Brands
When Your Competitors Are Established Brands
Price Premiums for Known Brands
What Causes Customers to Switch to a New Brand?
What Happens after Buyers Switch?
Shocking Findings on Brand Names
So What Does it All Mean for Pricing a New Product/Service?
Chapter 16 Pricing with Discounts
Discounts: A Double-Edged Sword
When Discounts Worry Consumers
Determining Best Discount Levels
Discounts’ Effect on Quality Ratings and Purchase
Concluding Thoughts on Pricing, and Especially on Testing Prices
Julie Boadilla on behalf of the Business & IP Centre