Not many issues are more fundamental to a company’s performance than the price it can extract from the market. Yet, for all its importance, many companies don’t devote enough resources to good price management disciplines, and worse, make avoidable mistakes that can undermine profitability. Yet help is now at hand. In his book Pricing on purpose: creating and capturing value
, US consultant and author Ronald A. Baker has provided a comprehensive guide to the art and science of pricing. This is an unashamedly theoretical book (in the best sense of the word). Baker eschews quick fixes for the difficult pricing problems many businesses face – instead, he argues that optimal pricing can only be accomplished when we look at pricing from multiple perspectives.
Accordingly, he takes the reader on a wide-ranging tour of economics, marketing, psychology, law and ethics, all the time drawing out insights that can assist CEOs better understand the factors that impact on that seemingly simple question: how much should we charge our customers.
“Pricing is the biggest lever you can pull in your business….”
The strategy and tactics of pricing is something CEOs are, often for good reasons, reluctant to talk about publicly. In 2005, however, CEO Forum did interview pricing consultant and former CEO of Boral Bricks, Eric Hahn on the pricing challenges CEOs face.