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- Herausgeber: Business Book Summaries
- Kategorie: Fachliteratur
- Sprache: Englisch
The must-read summary of Jagmohan Raju and W. John Zhang's book: "Smart Pricing: How Google, Priceline, and Leading Businesses Use Pricing Innovation for Profitability".
This complete summary of the ideas from Jagmohan Raju and W. John Zhang's book "Smart Pricing" demonstrates that many companies fail to establish a deliberate pricing strategy. In fact, many managers rarely give pricing much thought at all. In their book, the authors explain that this is a huge mistake as pricing offers an opportunity to move ahead. This summary provides readers with an insight into the possibilities of different pricing strategies and how some of the biggest companies have used them to push their companies forward.
Added-value of this summary:
• Save time
• Understand key concepts
• Expand your business knowledge
To learn more, read "Smart Pricing" and discover the key to establishing innovative pricing strategies that create value and capture customers.
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Seitenzahl: 39
Veröffentlichungsjahr: 2014
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Book Presentation:Smart PricingbyJagmohan Raju and Z. John Zhang
Book Abstract
About the Author
Important Note About This Ebook
Summary ofSmart Pricing(Jagmohan Raju and Z. John Zhang)
1. Price – the forgotten business lever
2. Nine innovative pricing strategies
3. How to use these mechanisms to maximum effect
Book Presentation:Smart PricingbyJagmohan Raju and Z. John Zhang
Book Abstract
MAIN IDEA
It’s amazing how many companies fail to have a deliberate pricing strategy – even though this is an absolutely critical and fundamental business element. In fact, many managers rarely give pricing much serious thought at all.
This is unfortunate because pricing offers great opportunities to move ahead for those who are astute and nimble. Instead of pricing your products or services using simplistic methods like cost-plus, match-your-competitors or figure out what people will pay and go with that as a price, there is a rich variety of other pricing strategies to try. For example, you might:
Figure out how to make money other ways by providing your product or service for free.Allow your customers to name their own price - pay whatever they think your product or service is worth.Build automatic price markdowns into your pricing model - so you can serve customers at both ends of the spectrum.Set up subscription plans which allow people to save - even for items like their weekly grocery shop.Develop performance-based pricing systems - where people pay only if what you have to offer works.“Getting the price right is, in the end, both art and science. Like most business practices, the best pricing decision is grounded not only in theory, but experience and instinct. Ultimately, smart pricing demands not only deep customer knowledge and good economic intuition, but a healthy dose of street smarts. Our experience has taught us that pulling the price lever demands courage and confidence, the kind best built on your knowledge about what pricing can do, how you can price your goods and services, and how consumers and your competition might react to your pricing decisions.”
– Jagmohan Raju and Z. John Zhang
About the Author
JAGMOHAN RAJU is a professor and chair of the marketing department of The Wharton School of the University of Pennsylvania. Dr. Raju, a graduate of Stanford University, IIM Ahmedabad and IIT Delhi (India), is past marketing editor of Management Science. He has published a large number of papers in his specialist topics of competitive marketing strategy and pricing. Dr. Raju teaches Stanford’s core marketing course and a pricing elective course.
Z. JOHN ZHANG is professor of marketing at Wharton. He is a graduate of the University of Michigan, the University of Pennsylvania and Huazong University of Science and Technology (China). Dr. Zhang has lectured at Columbia Business School, Washington University in St. Louis and in China as part of Wharton’s executive education program.
Important Note About This Ebook
This is a summary and not a critique or a review of the book. It does not offer judgment or opinion on the content of the book. This summary may not be organized chapter-wise but is an overview of the main ideas, viewpoints and arguments from the book as a whole. This means that the organization of this summary is not a representation of the book.
Summary ofSmart Pricing(Jagmohan Raju and Z. John Zhang)
1. Price – the forgotten business lever
It’s amazing how many companies work hard to grow their markets and fine-tune their operations but then pay little if any attention to how to price their products and services for maximum profitability. There’s a perception prices are beyond the control of managers. This is incorrect. Pricing is an important business lever and more time and energy needs to be devoted to developing a pricing strategy and doing the underlying research which will make it happen.
Most companies either set their prices arbitrarily or use one of three fairly ad-hoc and simplistic approaches:
Cost-plus pricing – specify a sales target, figure out what your costs will be at that volume and then add your company’s normal margin to come up with the retail price. The problems with this method of setting prices are:When customers like what you have to offer, they don’t care about your costs. All they look at is its value to them. You might be leaving lots of money on the table.It’s arbitrary to decide in advance what a “fair” margin is or isn’t. Too many factors can come into play here.Cost-plus is inward looking. It’s based solely on your operations, not on what customers are willing to pay.Competition-based pricing – look at what everyone else is charging and set prices a few percent below their price. Again, there are potential problems here:
