Contextual Pricing: The Death of List Price and the New Market Reality [Englisch] [Gebundene Ausgabe]

There are plenty of books that can tell you how to market products and services, but few give much attention to the art and science of pricing, even though price is often a critical factor in a buyer's decision-making process. Contextual Pricing fills that gap with detailed explanations of the multitude of variables that go into creating effective and profitable price strategy and tactics. Using research and case studies the authors illustrate how varying circumstances influence buyer mentality and behavior toward a price or set of prices, such as bundles and tiers. The overall tone is much like a textbook, however the many real-life examples add an entertaining quality to the academic content, as do chapter footnotes, which are often humorous (so be sure to read them). You'll learn the how's and why's of price sensitivity that enable you to successfully charge higher prices in certain circumstances, as well as find out how to avoid common pricing mistakes that can cost you big bucks. There's also good advice on how to overcome internal obstacles within a company's operational structure that can impede your ability set optimum prices. A revealing read, this book covers the gamut on pricing and is worth its own cost many times over.

Pricing is one of the most important decisions companies face. It is also one that is often reduced to a simple set of list prices, predefined bundles and reactionary policies. It does not need to be that way as the authors of Contextual Pricing share in their book. Rob Doctors, John G. Hanson, Cecilia Nguyen and Michael Barzelay have collaborated to create a highly informative, accessible and book that provides actionable advice and examples. They have created a book that is much more than the normal business book and more accessible than an academic look at the complex issue of pricing.

Highly recommended as a comprehensive, business focused and readily accessible discussion of this critical decision. The authors point out the importance of pricing when they discuss the observation that less than half of customer defections are price driven, yet when customers threaten to leave. They also point out that the idea of price elasticity is fundamentally flawed and how to reform this through a combination of segmentation and elasticity.

The authors point out that pricing decisions need to be driven by customer context rather than simple list prices. Pricing is more than just an issue of margin and production costs, but rather a complex set of contextually heavy factores. The authors go on in 17 chapters to explain exactly what this means. The chapters are listed at the end of this review.

This book is highly recommended to every manager and executive who is interested in driving greater success from more successful pricing decisions and programs. CMOs and CIOs should pay particular attention as Contextual Pricing covers the interaction and interdependencies between Pricing, Segmentation and Information.

Strengths

The book is comprehensive in its treatment of the issues of pricing as it covers the impact of marketing, segmentation, bundling and other pricing strategies. Each topic is covered from the central ideas to illustrative case studies.

The book covers emerging and new issues, reflecting advances in ideas around digital pricing, revised bundling strategies, and managing prices in tough economic times. All of these topics lead this book to go beyond just simple notions of price elasticity.

The case study examples cover a diverse range of industries from manufacturers to service companies from long established players to relatively new technology companies. The range of case studies reflects the full range of situations most companies will face.

Challenges

The book is not for the faint of heart. It deeply discusses topics in a significant way that makes the book one that needs to be read, reflected upon, and thought through to see how they apply to your situation. There are few books that have as much underlining and comments in the margins as this one.

The book covers significant ground related to pricing which limits the depth at which it can go into any one topic. Read this book to get a strong understanding of pricing and its role in management. Use that understanding to investigate specific pricing issues.

Here is the list of chapters that give you an idea of the books contents without giving those contents away.

Part 1: The Journey from Product to Context
Chapter 1 - Context and the Death of List Price
Chapter 2 - Why Value Matters Less than Competition
Chapter 3 - Which Context Matter to You?
Chapter 4 - Living in the Digital World
Chapter 5 - Antidotes to Prices Pressure

Part 2: Pricing for Poets and Profit Mazimizers
Chapter 6 - Price Structure
Chapter 7 - Scientific Bundling and Tiering
Chapter 8 - Dangerous Ways to Reduce or Increase Price

Part 3: Pricing Programs and the Marketing Mix
Chapter 9 - Segmentation, Context at Time
Chapter 10 - The Hinge of Fate: Pricing Strategy
Chapter 11 - Higher Return: Introductory Pricing Strategies
Chapter 12 - Brand, Messaging, and Competition

Part 4: Tools for Management
Chapter 13 - First Steps and Missteps
Chapter 14 - Cheap and Cheerful Pricing Tools
Chapter 15 - Key Contextual Data is Not in Your Company's Database
Chapter 16 - An Enabling Systems Architecture
Chapter 17 - Creative Pricing

Too many chefs -- four different authors -- make for occasionally choppy reading in a book with lots of excellent insights into a complex and current topic.

There's a good executive summary available on the Accenture web site.