Setting Profitable Prices: A Step-by-Step Guide to Pricing Strategy—Without Hiring a Consultant	7
	Copyright	8
	Contents	11
	Preface	17
	Author Credentials	17
	If You Can Afford a Pricing Consultant . . .	18
	Don't Have the Cash to Invest?	19
	How Big of a Rush Are You In?	19
	Chapter Summaries	20
	Acknowledgments	23
	Part 1: How to Set Prices for Maximum Profits	25
	Chapter 1: Why Pricing Is the Key to Your Success	27
	Raise Prices—or Sell More Products?	27
	Big-Company Case History	29
	Tiny-Company Case History	29
	Chapter 2: Why Most Companies Stink at Pricing (and How You Can Do Better!)	31
	The "Myth" of Creating Demand Curves	32
	How Your Competitors Are Setting Prices	33
	Cost-Plus Pricing	33
	Two Ways This Strategy Can Make You Lose Money	33
	Match-Your-Competitors Pricing	35
	Part 2: How the Market Will Value Your New Product	37
	Chapter 3: Analyzing Your Competitors' Prices	39
	You Do So Have Competitors!	39
	How to "Pick" Your Competitors	40
	Direct vs. Indirect Competitors	40
	How Consumers Evaluate Prices	42
	How to Get Profitable Ideas from Your Competitors	43
	Chapter 4: Environmental Factors That Can Affect Your Pricing	45
	Environmental Factors Overview	45
	The Economy	45
	Competitors	48
	Government Regulation and Legal	48
	Social Trends	49
	Technological Change	50
	Chapter 5: Pick the Positioning of Your New Product	53
	There Are Only 3 Choices!	53
	The Psychology of Price Positioning	54
	Penetration Price Positioning	55
	Two Situations that Call for Penetration Pricing	55
	Two Reasons to Not Use Penetration Pricing	56
	How to Avoid a Price War—If You Really Do Have 30 Percent Lower Costs	58
	Skimming (or Premium) Price Positioning	59
	Net Result	60
	Temporary Premium Pricing	61
	Prestige Pricing	61
	Competitive Price Positioning	62
	Reasons to Use a Competitive Price Positioning Strategy	63
	Learning More about Competitive Pricing	64
	Chapter 6: Analyzing Your Buyer Benefits/Drawbacks Relative to Your Competitors	67
	Uncovering What Buyers Really Value/Hate about Products in Your Marketplace	68
	Learn More about Calculating Buyer Valuation of Different Features	68
	Chapter 7: Picking a "Ballpark" for Your Best Price	71
	You Will Not Be "Stuck" with Your Decision!	72
	Can't Make a Profit at that Price Range?	73
	Not Sure about Your Results?	73
	Learn More about Buyers' Reactions to Price Ranges	74
	Soliciting Donations	74
	Buyers' Assimilation or Contrasting of Prices	74
	Part 3: Your Cost Analysis	77
	Chapter 8: Evaluating Your Costs	79
	The Ideas Behind "Target Costing" and "Target Engineering"	79
	Types of Costs	80
	Sunk Costs	80
	Overhead Costs	80
	Direct Costs	81
	The Hardest Part of Calculating Costs	81
	Reasons for Launching a Product that Doesn't Cover Overhead	82
	Part 4: Fine-Tuning Your Price	83
	Chapter 9: Is Your Profit Potential Acceptable?	85
	If You're Happy with Your Potential Profits	85
	If You're Not Happy with Your Potential Profits	86
	Option #1: Dump the Idea and Move On	86
	Option #2: Change Your Price Positioning	87
	Option #3: Offer Some Higher-Priced Add-Ons	87
	Option #4: Offer Some "Utilities" that Will Allow a Higher Price	88
	Option #5: Find Customer Segments Willing to Pay More	89
	Next Step	90
	Chapter 10: Psychological Adjustments to Your Price	91
	Understanding "Barriers" in Prices	92
	Staying below Barriers	92
	Increasing Prices up to Barriers	93
	Barrier Price Adjustments for You	93
	Numbers that Say "Discount" to Buyers	94
	Test Your Knowledge!	95
	Visually Appealing Prices	96
	Selling to Businesses	97
	Learn More about Thresholds	98
	Learn More about the Effect of Numbers	99
	Part 5: Testing Your Prices	101
	Chapter 11: Testing Prices	103
	The Psychology of You—in Setting Prices	103
	Can You Test?	105
	If You Cannot Test Prices	105
	The Difference between Testing and Research	105
	Chapter 12: Using Google to Test Prices for Free (or Almost Free)	107
	Two Methods for Almost-Free Testing!	107
	A/B Split Testing with Google AdWords	108
	Using Google Optimizer to Test Multiple Things	111
	How to Get Started	112
	Regrets!	113
	Part 6: Pricing in Special Situations	115
	Chapter 13: Pricing Services	117
	Imagine No Chapter 13!	117
	The Complications of Setting Prices for Services	118
	The Myth of Pricing Based on "What You Want to Earn"	118
	Pricing by the Hours versus the Job	118
	How to Protect Yourself from Client Add-Ons to a Fixed Price Job	119
	Finding What Service Competitors Charge	120
	Picking Your Price Positioning	121
	What Your Price Says about Your Firm	121
	How to Charge Higher Prices to Those Willing to Pay More	122
	Chapter 14: Pricing New Products/Services, Part 1: When Your Brand Is Unknown	125
	The Problems in Pricing Something New	125
	Price Equals Quality Buyer Perception	126
	Does Quality Equal Likelihood-to-Buy?	126
	Understanding "Bargain Hunters"	127
	Price Preferences by Product Type	127
	Detailed Research on Buyer Price Position Preferences	128
	Additional Research on Preferred Prices	131
	Learn More about Risk and Pricing	134
	Chapter 15: Pricing New Products/Services, Part 2: Competing with Established Brands	137
	When Your Competitors Are Established Brands	137
	Advantages for Known Brands	138
	Risk Avoidance	140
	Price Premiums for Known Brands	141
	Discounting Differences	144
	Advantages for Unknown Brands(Yes, There Are a Few!)	144
	What Causes Customers to Switch to a New Brand?	148
	Factors for Switching	148
	Likelihood to Switch	149
	Convenience	149
	Doing What Others Do	149
	Regret and Switching	150
	What Happens after Buyers Switch?	150
	Shocking Findings on Brand Names	151
	So What Does it All Mean for Pricing a New Product/Service?	151
	Chapter 16: Pricing with Discounts	153
	Discounts: A Double-Edged Sword	153
	When Discounts Worry Consumers	154
	What Worries Consumers about Discounts	157
	What Other Studies Say	158
	Determining Best Discount Levels	160
	Discounts' Effect on Quality Ratings and Purchase	161
	Concluding Thoughts on Pricing, and Especially on Testing Prices	163
	Appendix of Worksheets	165
	The Competitor Pricing Worksheet	165
	Service Business Worksheet	165
	Product Business Worksheet	167
	Sponsor Opportunities Business Worksheet	169
	The Buyer Benefits Worksheet	171
	The Narrowing Your Price Range Worksheet	173
	The Cost Analysis Worksheet	176
	Direct Costs Worksheet	177
	Overhead Costs Worksheet	178
	Sunk Costs Worksheet	179
	Bibliography	181
	About the Author	195
	About the Companion Web Site	197
	Index	199