Setting Profitable Prices, + Website - A Step-by-Step Guide to Pricing Strategy--Without Hiring a Consultant

Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy—Without Hiring a Consultant

Copyright

Contents

Preface

Author Credentials

If You Can Afford a Pricing Consultant . . .

Don't Have the Cash to Invest?

How Big of a Rush Are You In?

Chapter Summaries

Acknowledgments

Part 1: How to Set Prices for Maximum Profits

Chapter 1: Why Pricing Is the Key to Your Success

Raise Prices—or Sell More Products?

Big-Company Case History

Tiny-Company Case History

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

Cost-Plus Pricing

Two Ways This Strategy Can Make You Lose Money

Match-Your-Competitors Pricing

Part 2: 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

The Economy

Competitors

Government Regulation and Legal

Social Trends

Technological Change

Chapter 5: Pick the Positioning of Your New Product

There Are Only 3 Choices!

The Psychology of Price Positioning

Penetration Price Positioning

Two Situations that Call for Penetration Pricing

Two Reasons to Not Use Penetration Pricing

How to Avoid a Price War—If You Really Do Have 30 Percent Lower Costs

Skimming (or Premium) Price Positioning

Net Result

Temporary Premium Pricing

Prestige Pricing

Competitive Price Positioning

Reasons to Use a Competitive Price Positioning Strategy

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

Soliciting Donations

Buyers' Assimilation or Contrasting of Prices

Part 3: Your Cost Analysis

Chapter 8: Evaluating Your Costs

The Ideas Behind "Target Costing" and "Target Engineering"

Types of Costs

Sunk Costs

Overhead Costs

Direct 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

Option #1: Dump the Idea and Move On

Option #2: Change Your Price Positioning

Option #3: Offer Some Higher-Priced Add-Ons

Option #4: Offer Some "Utilities" that Will Allow a Higher Price

Option #5: Find Customer Segments Willing to Pay More

Next Step

Chapter 10: Psychological Adjustments to Your Price

Understanding "Barriers" in Prices

Staying below Barriers

Increasing Prices up to Barriers

Barrier Price Adjustments for You

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?

If You Cannot Test Prices

The Difference between Testing and Research

Chapter 12: Using Google to Test Prices for Free (or Almost Free)

Two Methods for Almost-Free Testing!

A/B Split Testing with Google AdWords

Using Google Optimizer to Test Multiple Things

How to Get Started

Regrets!

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

How to Protect Yourself from Client Add-Ons to a Fixed Price 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

Advantages for Known Brands

Risk Avoidance

Price Premiums for Known Brands

Discounting Differences

Advantages for Unknown Brands(Yes, There Are a Few!)

What Causes Customers to Switch to a New Brand?

Factors for Switching

Likelihood to Switch

Convenience

Doing What Others Do

Regret and Switching

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

What Worries Consumers about Discounts

What Other Studies Say

Determining Best Discount Levels

Discounts' Effect on Quality Ratings and Purchase

Concluding Thoughts on Pricing, and Especially on Testing Prices

Appendix of Worksheets

The Competitor Pricing Worksheet

Service Business Worksheet

Product Business Worksheet

Sponsor Opportunities Business Worksheet

The Buyer Benefits Worksheet

The Narrowing Your Price Range Worksheet

The Cost Analysis Worksheet

Direct Costs Worksheet

Overhead Costs Worksheet

Sunk Costs Worksheet

Bibliography

About the Author

About the Companion Web Site

Index