Index
A
Activity-based costing, 196–197
Analytics, for pricing, 168–178
B
Benefits sought by customers
Break-even analysis for pricing, 207–243
case studies, 209–212, 225–232
derivation of formula, 233–234
developing charts and tables for, 235–243
fixed and sunk costs with, 224–225
for reaction to competition 216–217
incorporating variable costs, 212–213
with incremental fixed costs, 130–131, 213–216
competition and, 55
gains and losses, 93
See also Unbundling
Buy-response survey. See Price elasticity
C
Capitation price, 55
Change process, managing, 178–180
and price discounting, 244
and price discrimination, 317–318
bundling and, 55
in growth stage of product life cycle, 149–150
in maturity stage of product life cycle, 151
when to compete on price, 266–267
willingness and ability to defend against, 264–265
Competitive advantage, 246–251, 255
Competitive information, 261–265
collection and evaluation of, 261–263
Conjoint analysis. See Trade-off (conjoint) analysis
Consumer surplus, 18
Cost justification for price discrimination, 317
Cost leadership strategy, 147–149
Cost of search, 74–76, 81, 83, 103
Costs
See also Break-even analysis for pricing
Customer value modeling (CVM), 36–38
D
Decline, life cycle stage
consolidation strategy in, 155
harvesting strategy in, 154
retrenchment strategy in, 154
Demonstration projects, 179–180
Depth interviews. See In-depth interviews
Differentiation, 147–148, 150–152
value, 18–19, 21, 26, 37, 103–110, 118–123
Discounts. See Price discounts
Distribution channels, reevaluation of, 153
Dynamic pricing models, 137–138
E
Early adopters, 144
Economic value
See also Benefits sought
Ethical constraints on pricing, 305–308
Everyday low price, 97
F
“Fair” profit, 307
Fee-for-service, 55
Fences. See Price fences
Full-line forcing, 322
G
Growth, life cycle stage, 146–150
I
communicating value of with direct sales, 145–146
diffusion of, 143
marketing of through distribution channels, 146
pricing in growth stage, 143–150
strategy for pricing an, 143–146
Innovator’s Dilemma, The, 49
In-store purchase experiments, 277–279, 299–300
L
Laboratory purchase experiments, 279–280
LIFO (last-in, first-out) accounting, 187
M
Managerial judgment, 13
Market decline, pricing in, 153–155
Maturity, life cycle stage, 150–153
maintaining profits in, 151
Minimum advertised price (MAP) program, 314
Monetary benefits. See Benefits sought
Monetary value, 19, 23–32, 286
drivers. See Value drivers
See also Value, perceptions of versus actual
N
Negative-sum game, price competition as, 245, 260–261
Next best competitive alternative (NBCA), 20, 26, 64
NIFO (next-in, first-out) accounting, 187
P
Panel data, to estimate price elasticity 272–274
Penetration pricing. See Pricing, penetration
Perceived value. See Value, perceptions of versus actual
Performance-based rebate, 115–116
Positive-sum game, 245
Price
fairness, 90–91, 133, 137–139, 144
increases
preannouncing, 264
Price banding analysis, 112, 172–173
perceived fairness, 90–91, 133, 137–139, 144
proportional price evaluations, 87–88
reference prices, 21–23, 87–90
Price competition. See Competition
Price discounts, 64–70, 92, 97, 99, 114–117, 172–175
in competitive markets, 244
See also Promotional pricing
Price elasticity
attribute rating to measure, 283
buy-response surveys to measure, 283–286, 299–300
direct questioning about, 283
selecting appropriate technique, 299–300
using Internet-based techniques, 297–298
buyer-identification fences, 64–65
purchase location fences, 65–66
purchase quantity fences, 68–70
time of purchase fences, 66–68
Price promotions. See Promotional pricing
Price segmentation. See Segmentation
Price sensitivity, 13, 64–68, 149, 152
measuring and estimating, 269–301
break-even analysis case studies for, 209–212, 225–232
estimating customer response to, 124, 131–136
segments to distinguish within, 48–50
Price-offer configuration, 50–55
optimizing an offer bundle, 51–53
segment specific bundles, 53–54
unbundling strategically, 54–55
See also Unbundling
Price-volume tradeoff, 5, 13, 47, 124, 129–131, 152, 207–225
Pricing
break-even analysis for, 130–131, 207–243
cost-based, 9
ethical constraints on, 305–308
implementing strategy for, 14–15, 158–159
life cycle. See Product life cycle pricing
neutral, 129
penetration, 13, 127–129, 147–149
promotions. See Promotional pricing
versus tactical, 98
for brand-driven buyers (relationship buyers), 103, 105–107
for convenience-driven buyers, 103, 108
for economic downturn, 114–115
for price-driven buyers, 103, 106–108
for value-driven buyers, 103–105, 107
negotiation, policies for, 102–103
“no exceptions,” 99
promotional pricing, 115–117, 144–145
responding to objections, 100–110
Pricing strategy
and product life cycle, 141–156
implementation of, 14–15, 158–180
managing the change process, 178–180
motivation for, 159–160, 166–178
organization of pricing function, 159–166
Product life cycle pricing, 141–156
Promotional discrimination, 315, 318–320
communicating value with, 144–145
price-induced sampling, 145
pulsed, 116
See also Price discounts
Psychological benefits. See Benefits sought
Psychological value, 19, 23–24, 286
trade-off (conjoint) analysis to estimate, 32–36
R
Reference prices, 21–23, 87–90
Reference value, 19–21, 26, 37, 64
Regression analysis
Resale price
maintenance, 146
policies, 313
Robinson-Patman Act, 315–320, 322
S
Segmentation, 38–70, 119–121, 150
Senior management leadership, 178–179
Simulated purchase experiments, 288–289, 299–300
SPIN selling, 103
Strategic pricing. See Pricing, strategic
Strategic pricing pyramid, 6–7, 17, 160
Strategic sourcing, 98
T
Territorial restrictions, 321
Trade-off (conjoint) analysis, 289–294, 299–300
U
in maturity stage of product life cycle, 151–152
See also Bundling; Price-offer configuration
V
Value
communication, 11–12, 72–93, 126
adapting to purchase context, 81–82
differentiation, 18–19, 21, 26, 37, 103–110, 118–123
economic. See Economic value
exchange, 18
See also Economic value
drivers. See Value drivers
perceptions of versus actual, 7, 20, 77, 90, 287
psychological, 19, 23–24, 32–36, 286
use, 18