Related Brief:
How to Test and Optimize Your Pricing:
You can listen to a recording of a clinic on this subject here:
As part of our research, we have prepared a review of the best Internet resources on this topic. This comprehensive study represents hours of labor. Perhaps it will help you as you consider your strategy.
Rating System
These sites were rated for usefulness and clarity, but alas, the rating is purely subjective.
* = Decent ** = Good *** = Excellent **** = Indispensable
Actions
New Rules of the Retail Game ***
“Price comparing shopping bots have turned traditional retailing on its head. But are low prices all that customers want? Not really.”
http://meclabs.com/cgi-bin/pl/pl.cgi?snr
Are You Ready for the Online Marketplace? ***
“Online marketplaces offer participants the opportunity to reach more buyers, increase transaction volume, and lower customer acquisition costs. These benefits are offset by the risks loss of margin control, erosion of customer switching costs, channel conflict, and exclusion from new markets.”
http://meclabs.com/cgi-bin/pl/pl.cgi?som
Developing a Pricing Strategy, Part 1 **
Author Aaron Hurst introduces margin, then goes on to explore gross margin and net margin.
http://meclabs.com/cgi-bin/pl/pl.cgi?sc1
Developing a Pricing Strategy, Part 2 **
Examines margins, market variables, customer demand, customer expectations, competitive landscapes, and positioning.
http://meclabs.com/cgi-bin/pl/pl.cgi?sc2
Dynamic Pricing **
“A company’s customers have a wide range of purchase criteria – some customers are very price sensitive, while other customers emphasize non-price criteria. One way to serve both segments is to add a link on your site that takes the price-conscious customers to an auction site where they can bid for products. This allows you to separate customers into two broad categories: low-price shoppers and total-value shoppers.”
http://meclabs.com/cgi-bin/pl/pl.cgi?scd
Why Content Price Testing is Really, Really Smart **
“Even if you’re not in the publishing industry, if you’re selling anything online you may pick up an idea or two from this Case Study, which features lots of tactics an entrepreneur used to raise site sales conversion rates from blah to extraordinary. Entrepreneur Don Crowther tested pricing, adding graphics, and classic direct response copywriting to get visitors to purchase articles on PR at his site 101Publicrelations.com.”
http://library.marketingsherpa.com/barrier.cfm?CID=2021
Tools
The Content Matrix ***
“Before you price your online subscription service, get data on 463 competitors first…” This report costs $195.
http://sherpastore.com/store/page.cfm/1974
Profit Margin Calculator **
This calculator can help you determine the selling price for your products to achieve a desired profit margin.
http://www.dinkytown.net/java/ProfitMargin.html
Gross Profit Margin Ratio **
“The gross profit margin ratio indicates how efficiently a business is using its materials and labor in the production process. It shows the percentage of net sales remaining after subtracting cost of goods sold. A high gross profit margin indicates that a business can make a reasonable profit on sales, as long as it keeps overhead costs in control.”
http://meclabs.com/cgi-bin/pl/pl.cgi?sae
Books
Power Pricing: How Managing Price Transforms the Bottom Line ***
The two authors “team up to explain current pricing concepts and trends. They cover the mathematical foundations and relationships of price, cost, and profit and follow with discussions of international, nonlinear, and product pricing and price customization and bundling. They also consider the role of organizational and managerial structures on price setting.”
http://www.amazon.com/exec/obidos/tg/detail/-/068483443X/
Pricing for Profitability: Activity-Based Pricing for Competitive Advantage ***
“Overpricing will lead to lost sales that would have been profitable at a lower price, while underpricing leads to sales that bring revenue without profit. Activity-based pricing is a new paradigm for improving profitability by reducing the occurrence of pricing mistakes and placing less emphasis on increasing revenue and more on improving profits. Pricing for Profitability will help any company set prices that are both attractive to buyers and profitable for the company.”
http://www.amazon.com/exec/obidos/tg/detail/-/0471415359/
The Strategy and Tactics of Pricing: A Guide to Profitable Decision Making ***
“This volume is designed for MBA or advanced undergraduate courses in pricing strategy or pricing and product policy. Practical in focus and lively in style, the book provides a comprehensive, managerially-focused, integrated, step-by-step guide to pricing analysis and strategy development. New to this third edition are: an updated, practical guide to legal limitations on pricing; a chapter on pricing in and through channels of distribution; an expanded and revised chapter on managing value perceptions and price expectations; and more examples particularly relating to e-commerce.”
http://www.amazon.com/exec/obidos/tg/detail/-/013026248X/
Valuation and Pricing of Technology-Based Intellectual Property **
The author “draws upon over thirty years of experience in developing technology-based intellectual property to thoroughly examine this volatile process from all angles. He presents six proven valuation methods, and a series of case studies that show them in action.”
http://www.amazon.com/exec/obidos/tg/detail/-/047125049X/
Winning the Profit Game: Smarter Pricing, Smarter Branding **
“No dry academic treatise, Winning the Profit Game is a guide to growing profits, in boom times and bust, using smart top-line strategies that optimize price, costs, customer behavior, and volumes.”
http://www.amazon.com/exec/obidos/tg/detail/-/0071434720/
The Price Advantage *
“Guide for managers through the maze of pricing issues, based on firsthand experience with hundreds of companies. Examines approaches for analyzing and improving pricing performance, demonstrating those approaches with real case studies.”
http://www.amazon.com/exec/obidos/tg/detail/-/0471466697/
Related MEC Reports
How to Test and Optimize Your Pricing:
https://www.marketingexperiments.com/see/1049
Three Ways to Sell Online Content:
https://www.marketingexperiments.com/see/1030
Order Forms Tested:
https://www.marketingexperiments.com/see/1052
Abandoned Shopping Cart Recovery:
https://www.marketingexperiments.com/see/1054
Shipping Charges Tested:
https://www.marketingexperiments.com/see/1060
Recorded Clinic:
Windows Media Audio:
http://meclabs.com/cgi-bin/pl/pl.cgi?cow
RealMedia:
http://meclabs.com/cgi-bin/pl/pl.cgi?cor
Credits:
Editor – Flint McGlaughlin