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Smart Pricing: How Google, Priceline, and Leading Businesses Use Pricing Innovation for Profitability
In "Smart How Google, Priceline and Leading Businesses Use Pricing Innovation for Profitability, " Wharton professors and renowned pricing experts Jagmohan Raju and Z. John Zhang draw on examples from high tech to low tech, from consumer markets to business markets, and from U.S. to abroad, to tell the stories of how innovative pricing strategies can help companies create and capture value as well as customers. They teach the pricing principles behind those innovative ideas and practices. "Smart Pricing" introduces many innovative approaches to pricing, as well as the research and insights that went into their creation. Filled with illustrative examples from the business world, readers will learn about restaurants where customers set the price, how Google and other high-tech firms have used pricing to remake whole industries, how executives in China successfully start and fight price wars to conquer new markets. " ""Smart Pricing" goes well beyond familiar approaches like cost-plus, buyer-based pricing, or competition-based pricing, and puts a wide variety of pricing mechanisms at your disposal. This book helps you understand them, choose them, and use them to "win."
212 pages, Hardcover
First published February 22, 2010
69 people are currently reading
852 people want to read
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Displaying 1 - 30 of 31 reviews
May 2, 2019
The book was a great complement to my Pricing Strategy class at business school. I skimmed the book for key ideas, as a way of studying for the exam. The examples are engaging and serve to explain what smart pricing is. For anyone who wants to move away from the single-price point model and wants to understand why cost-plus pricing and competitor pricing are not ideal, this book is a must read.
May 5, 2019
Zaista zanimljiva knjiga puna primjera i različitih principa. Vrlo se lako čita i primjerena je za široku skupinu ljudi. Iako je na mjestima kategorizirana kao knjiga iz područja mikroekonomije, ovo je u biti knjiga iz područja marketinga.
January 4, 2011
"An interesting read that walks through the various philosophies of price modeling and gives insight into how you should be pricing your products in the current technological era.
January 4, 2013
A must read for every entrepreneur as he/she ponders on the price tag for the service/product offering
January 21, 2019
I read this book 8 years too late, good, but fairly outdated content. Published in 2010, at the time of publication, the book discusses various "corner case" pricing scenarios like "pick your price", operating under marketing profit, instead of operational or accounting profit (when to accept a loss leader in your product line), snob pricing etc.
Case studies are fairly diverse, from AMEX and Diners Club introduction of credit cards and their "premiere" card service, the Centurion and "The Black Card" for Visa outlining a real-world example for snob pricing, to the introduction of the McCafe and "Play Land", the store within the store as a "marketing profit strategy". Also spent a significant amount of time casing out grocery story product placement, Spoiler-Alert: dairy is a loss-leader, but it brings everyone to the store. This example I felt was most absurd to put, as it's so well known, even to common folks, that it's basically folk-lore knowledge at this point.
Much of the book was fairly common sense, and in a world where Airbnb and Uber are fairly established services, it's difficult to listen to hour-long use cases of Priceline and the Google ads auction as anything other than historical information. Still, this book would probably go well as an appendage to a more mainline text on applied pricing from a traditional microeconomic perspective. If they updated the content significantly to address newer trends and issues within the digital space, this book would be much better. Conditional recommend
Case studies are fairly diverse, from AMEX and Diners Club introduction of credit cards and their "premiere" card service, the Centurion and "The Black Card" for Visa outlining a real-world example for snob pricing, to the introduction of the McCafe and "Play Land", the store within the store as a "marketing profit strategy". Also spent a significant amount of time casing out grocery story product placement, Spoiler-Alert: dairy is a loss-leader, but it brings everyone to the store. This example I felt was most absurd to put, as it's so well known, even to common folks, that it's basically folk-lore knowledge at this point.
Much of the book was fairly common sense, and in a world where Airbnb and Uber are fairly established services, it's difficult to listen to hour-long use cases of Priceline and the Google ads auction as anything other than historical information. Still, this book would probably go well as an appendage to a more mainline text on applied pricing from a traditional microeconomic perspective. If they updated the content significantly to address newer trends and issues within the digital space, this book would be much better. Conditional recommend
April 9, 2021
The book provides insights about pricing how critical pricing is to profit. The book provide evidence that pricing is more important than variable cost, fixed cost, and sales quantity when it comes to profit. Numerous examples of pricing strategies implemented by very successful companies was presented in the book. Furthermore, the book covered pricing strategies across industries, including, technology, health care, music, and apparel. I have learned a lot from this book and glad that I chose it for this assignment.
However, there is always a room for improvement and this book is no exception. Few things I was not able to find in the book and I would like reading about it. For example, I am a civil engineer and the company I work at provides engineering services to companies. The authors did not touch the engineering industry and how we can use smart pricing techniques. After all, I should be able to implement what I learn from books into my real life. Another comment is related to the introduction chapter when the authors talked about the old/conventional way of pricing. What I want to mention here is I do not think any company uses any of these pricing strategies of itself. On the contrary, the pricing is usually a combination of these strategies. At the company I work at, for example, we use the four strategies (more or less) and we cross-check between them and see the differences in prices and come up with the final price. It is very theoretical to say that a company uses purely one strategy without any kind of combination or cross-checks.
However, there is always a room for improvement and this book is no exception. Few things I was not able to find in the book and I would like reading about it. For example, I am a civil engineer and the company I work at provides engineering services to companies. The authors did not touch the engineering industry and how we can use smart pricing techniques. After all, I should be able to implement what I learn from books into my real life. Another comment is related to the introduction chapter when the authors talked about the old/conventional way of pricing. What I want to mention here is I do not think any company uses any of these pricing strategies of itself. On the contrary, the pricing is usually a combination of these strategies. At the company I work at, for example, we use the four strategies (more or less) and we cross-check between them and see the differences in prices and come up with the final price. It is very theoretical to say that a company uses purely one strategy without any kind of combination or cross-checks.
November 15, 2020
Despite that the Smart Pricing book was released back in 2010, I found it to be fascinating and stimulating at the same time. In fact, the book has broadened my view on the art of inventive price discrimination.
Smart Pricing stipulates a unique perspective on how smart pricing models can help businesses to grow and markets to transform. Providing best pricing practices from various businesses worldwide and research insights is quite illuminating.
However, to satisfy my curiosity, I searched for any publication/article that discusses and analyzes the impact of adopting any of the smart pricing models in various businesses that were utilizing traditional pricing strategies and gauge the growth rate and demonstrate how the market has transformed. This would have demonstrated more efficiently how these innovative smart pricing mechanisms can maximize the profit and the transformation process from traditional pricing strategy to the smart ones.
Definitely, it’s worth your while.
Smart Pricing stipulates a unique perspective on how smart pricing models can help businesses to grow and markets to transform. Providing best pricing practices from various businesses worldwide and research insights is quite illuminating.
However, to satisfy my curiosity, I searched for any publication/article that discusses and analyzes the impact of adopting any of the smart pricing models in various businesses that were utilizing traditional pricing strategies and gauge the growth rate and demonstrate how the market has transformed. This would have demonstrated more efficiently how these innovative smart pricing mechanisms can maximize the profit and the transformation process from traditional pricing strategy to the smart ones.
Definitely, it’s worth your while.
January 12, 2019
Too many people set prices passively, either just adding a percent to your costs or by matching what everyone else in your industry does. But price is a story, and it's one of the most critical elements that determines whether you succeed or not. And lower is not always the story you want to tell.
This book walks through several different pricing approaches and, best of all, shares the kind of competitive environment and internal capabilities that are required to make that strategy work. It's a good way to stretch your thinking on how you price and consider some other options, like variable pay for different customers, pay based on the individual benefit received, and even letting the customers choose what to pay (there is a situation where that works!).
This book walks through several different pricing approaches and, best of all, shares the kind of competitive environment and internal capabilities that are required to make that strategy work. It's a good way to stretch your thinking on how you price and consider some other options, like variable pay for different customers, pay based on the individual benefit received, and even letting the customers choose what to pay (there is a situation where that works!).
April 8, 2020
Smart pricing is an excellent book to read for people who want to understand the power of pricing. The book provides many examples of how pricing can affect profitability. Most businesses would choose the cost plus markup model where competitive industries would be on a constant price war. The book briefly showcase the idea that firms can attracts customers and increase profits by choosing the right price model. The book provided many examples of how different pricing models affect small, mediocre ,and huge firms. The only downside of the book is that the author did show cultural implications and pricing. Also there were no graphical plots illustrating the price elasticity of such pricing models.
August 13, 2023
Good introduction to pricing mechanisms, structures and monetization with real life examples from both retail and e-commerce retailers, however limited to mostly large and established corporates. I thought the concepts presented were slightly outdated as the book was published more than two decades ago but it was still an interesting read, helpful enough for beginners who are trying to build a product or understand different types of relationships between buyers and seller. The last two chapters of the book were difficult to read for me (I had to force myself to keep reading because, well, I was so close to finishing it). Towards the end, I thought the concepts were common sense therefore the last few chapters could be more concise.
July 3, 2018
For a non-business major, it was an interesting overview from business professors of traditional pricing mechanisms, their shortcomings, and how innovative companies used different pricing strategies to become market leaders. Really drove home to me how important and powerful setting prices is.
Good to see how they analyzed new practices in the late 2000s like subscriptions on Amazon and Google ads, and see how they look in hindsight. Authors went into depth into Amazon’s strategy a bit, and how it helps explain a lot of their recent practices and purchases like Whole Foods. They want a share of spending, rather than domination of ecommerce only
Good to see how they analyzed new practices in the late 2000s like subscriptions on Amazon and Google ads, and see how they look in hindsight. Authors went into depth into Amazon’s strategy a bit, and how it helps explain a lot of their recent practices and purchases like Whole Foods. They want a share of spending, rather than domination of ecommerce only
June 23, 2018
Finished the book days ago, now I tried to look back what was in my mind about pricing before and after: some points definitely will be helpful, which are, target the clients before setting the price, not necessary to chase to bottom price as higher prices may actually attract more clients.
September 27, 2017
Great analysis and illuminating examples. Highly recommended for basic understanding of the importance of pricing in Marketing and business as a whole.
March 31, 2020
Amazing
The book is short and sweet. So many examples and historical events to learn from. Easy to comprehend, definitely worth your while. Highly recommend.
The book is short and sweet. So many examples and historical events to learn from. Easy to comprehend, definitely worth your while. Highly recommend.
August 5, 2023
More like a history about pricing. I think this book has lost market value as time moves so fast and pricing examples as good as they are - just too old for today to gain from them.
February 27, 2017
A brief introduction into pricing, a god intro if you are dealing with companies in retail, e-commerce or are generally interested about pricing policies. Expect the book a nice but very superficial and abbreviated read.
July 1, 2016
Preço cost- plus pode acomodar pois a empresa se acomoda no custo. Também pode n cobrar um preço premium
O consumidor n se importa em n ter desconto se o ganho da empresa for tec ou de processo mas quer o desconto se os ganhos for de redução de insumos.
Custo é função da venda portanto n garante a margem
Preço concorrente - os preços dos mercados podem entrar em espiral descendente pois todos concorrentes querem ganhar share
Preço com base do consumidor possibilita cobrar diferente baseado na percepção dos clientes
Pague quanto quiser - os consumidores tem senso de justiça. Podemos pressionar com pressão social( metropolitan)
Vale para mercados com custo marginal/produção muito baixos
Guerra de preços - tvs chinesas podem ajudar a aumentar a escala/dizimar concorrentes pequenos e ganhar share
Economia dos centavos - 0,10 por dia porções maiores por um pouco a mais(macsonalds) a sensação de ganhar p o consumidor é fundamental.
Markdown automatico - controlar a demanda e aumentar o fluxo com preços e descontos predeterminados progressivos p produtos de moda, gera sensação de escasses e imediatismo e ainda atingem os sensíveis a preço
Preço opaco o comprador n sabe de quem esta comprando, isso garante ao fabricante q pode cobrar preços mais cheio dos restos dos clientes. Passagens e hoteis
Cobrar preços diferentes de cada tipo de consumidor. Dar desconto para uma região mais compradora de preço?
Dar desconto para quem poe expositor
Gestão no cliente - vender a isca sem lucro mas obtendo o lucro nas vendas agregadas( r1 a 0 e r2 a 20)
Pague se funcionar cada transação é uma parceria
O consumidor n se importa em n ter desconto se o ganho da empresa for tec ou de processo mas quer o desconto se os ganhos for de redução de insumos.
Custo é função da venda portanto n garante a margem
Preço concorrente - os preços dos mercados podem entrar em espiral descendente pois todos concorrentes querem ganhar share
Preço com base do consumidor possibilita cobrar diferente baseado na percepção dos clientes
Pague quanto quiser - os consumidores tem senso de justiça. Podemos pressionar com pressão social( metropolitan)
Vale para mercados com custo marginal/produção muito baixos
Guerra de preços - tvs chinesas podem ajudar a aumentar a escala/dizimar concorrentes pequenos e ganhar share
Economia dos centavos - 0,10 por dia porções maiores por um pouco a mais(macsonalds) a sensação de ganhar p o consumidor é fundamental.
Markdown automatico - controlar a demanda e aumentar o fluxo com preços e descontos predeterminados progressivos p produtos de moda, gera sensação de escasses e imediatismo e ainda atingem os sensíveis a preço
Preço opaco o comprador n sabe de quem esta comprando, isso garante ao fabricante q pode cobrar preços mais cheio dos restos dos clientes. Passagens e hoteis
Cobrar preços diferentes de cada tipo de consumidor. Dar desconto para uma região mais compradora de preço?
Dar desconto para quem poe expositor
Gestão no cliente - vender a isca sem lucro mas obtendo o lucro nas vendas agregadas( r1 a 0 e r2 a 20)
Pague se funcionar cada transação é uma parceria
September 12, 2014
Desde Leader Summaries recomendamos la lectura del libro Fijación de precios inteligente, de Jagmohan Raju.
Las personas interesadas en las siguientes temáticas lo encontrarán práctico y útil: marketing y ventas, sistemas de fijación de precios.
En el siguiente enlace tienes el resumen del libro Fijación de precios inteligente, Alternativas innovadoras a los sistemas tradicionales de fijación de precios: Fijación de precios inteligente
Las personas interesadas en las siguientes temáticas lo encontrarán práctico y útil: marketing y ventas, sistemas de fijación de precios.
En el siguiente enlace tienes el resumen del libro Fijación de precios inteligente, Alternativas innovadoras a los sistemas tradicionales de fijación de precios: Fijación de precios inteligente
September 12, 2018
Very interesting thoughts on how companies make money vs. how they could or should make money. Gives insight on various pricing methods and when the best times to implement new techniques are. I've seen many of these, but not laid on in this format. Very well done.
Read
August 7, 2015Good summary but lack original ideas
Good summary but lack original ideas. Feel like the author can expand a little bit more on pricing structure rather than just analyzing existing ones.
Good summary but lack original ideas. Feel like the author can expand a little bit more on pricing structure rather than just analyzing existing ones.
October 6, 2015
Great info on some of the unconventional alternatives to the pricing we all know (and is very limiting).
Most of these methods are counter intuitive. I think this is a must read for anyone who is into selling products or services. A next step in pricing evolution (and a neccesary one I might add)
Most of these methods are counter intuitive. I think this is a must read for anyone who is into selling products or services. A next step in pricing evolution (and a neccesary one I might add)
April 19, 2016
Great book. Almost every business spends extremely little time focusing on the science of their pricing and all the options they have available. These two Wharton Professors bust through that logic and show with some of the greatest companies in the world the importance of pricing.
January 15, 2013
Must read to know your pricing for higher profitability.
July 5, 2014
Excellent book with a host of practical examples. The China pricing examples provide great insights into doing business in China and also in managing price competition
Want to read
September 23, 201357
August 20, 2015
Not rocket science...I liked the Pay what you want idea. It also motivated me to always have a premium price on anything I sell.
Read
April 6, 2016a store is a place in which to sell goods, not a place in which to carry goods which do not sell
October 17, 2016
Fantastic resource and a good substitute for a college-level course on pricing. All the examples offered in this book are worth studying.
October 25, 2016
Educational and extremely helpful. As a business owner, I was looking for that golden tip and walked away with four seeing we serve a few products to many markets.
July 1, 2012
Great ideas on how to price what you sell.
Displaying 1 - 30 of 31 reviews