Pricing: The Third Business Skill: Principles of Price Management

by Ernst-Jan Bouter

Introduction and Overview of Pricing
The Third Business Skill shows you in a clear and concise manner how to set optimum selling prices for your company and setup a high quality pricing function, using accessible models and examples. Discover how Google, LinkedIn, Apple, BMW, Gillette and other successful companies achieve high profits by deploying optimized pricing strategies. Read about General Electric's CEO when he considers GE’s shortcomings in pricing. After reading this book, the pricing function will no longer hold any secrets for you, empowering you to get started on structurally improving your margins right away!

Genres: Business

226 pages, Paperback

First published July 1, 2013

Reviews

[Jill · Rating 3 out of 5]

Some good nuggets. Ideal for those considering employing a Pricing Manager or team in a business that currently doesn't have one.

[Ronald J. · Rating 2 out of 5]

First skill, inventor; second, salesman, third, pricing. Good pricing governance starts with the CEO. Price is a one-figure summary of what a company hs to offer (you are what you charge for). He says ideally the CEO himself also holds Chief Pricing Officer, citing Steve Jobs, Sam Walton, and Albert Heijn. The book is divided into three parts: The Art of Pricing (why?); The Science of Pricing (what?); The Execution of Pricing (how?). The book is rather a simple overview of pricing, not much detail is provided. His 12 Cs of pricing and revenue models is interesting, if not overly complicated. He does understand that value is subjective, not objective, but not much attention is paid to the psychology of pricing. The discussion on tacit collusion was good. He points out that King Camp Gillette was anti-capitalist who pursued utopian socialism his whole life. I agree with his view that the legacy airlines have overshot with their pricing, making it too complex with add-ons, etc. I would say hotels are the best pricers today.

I liked the quote from GE’s CEO Jeffrey Immelt from 2006, about how $50 billion is probably being left on the table due to sloppy pricing. That would never be tolerated with costs, but pricing? If you’re a pricer, this book is probably too basic, and I found it’s repetitive repeating what it’s going to cover very distracting.