Three things can happen when establishing a product price. A price set too high is a lost sale that could have been profitable at a lower price. A price set too low is rewarded with unprofitable work. Only when a price is set appropriately does a company make both a sale and a profit. Just as activity-based costing and activity-based management revolutionized the cost accounting world, activity-based pricing will bring a disciplined approach to developing pricing. Activity-based pricing examines the relationships between price, cost and sales volume and how this relationship effects profitability. Pricing for Profitability joins the disciplines of marketing, economics, business strategy, engineering and cost accounting to achieve maximum profitability.
From the Inside Flap
Accurate pricing for improved profit
When pricing a product, you have to get it right. 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.
Activity-based pricing will help you:
* Establish prices based on solid knowledge of customer demand and product cost
* Stop unintentionally pricing products at a loss
* Determine how much of a price is profit
* Use superior financial knowledge to generate superior financial return
Pricing for Profitability is intended for use by people from a variety of disciplines: marketing, sales, cost accounting, engineering, economics, and business strategy. While most pricing books approach pricing from a marketing standpoint, this book treats the entire pricing process from multiple points of view, to provide a broad understanding of how to use pricing to gain a competitive advantage.
Too many companies unknowingly price their products at a loss, sometimes a substantial loss, because they do not understand the important interrelationships of price and sales volume and sales volume and cost. This book offers a comprehensive treatment of these interrelationships that will make a difference in your bottom line. The tools and real-world examples included here will allow companies to consistently earn a profit on their products, no matter what that product is.
Organized so that it can be read at several different levels of detail, Pricing for Profitability will help anyone involved in the pricing process make more accurate-and more profitable-decisions.
From the Back Cover
Accurate pricing for improved profit When pricing a product, you have to get it right. 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 while 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.
Activity-based pricing will help you:
Establish prices based on solid knowledge of customer demand and product cost Stop unintentionally pricing products at a loss Determine how much of a price is profit Use superior financial knowledge to generate superior financial return
About the Author
JOHN L. DALY is President of Daly Consulting and Executive Education Inc., which provides consulting in pricing strategy and profit im-provement. Executive Education Inc. produces continuing professional education seminars for financial managers. Mr. Daly is also a former manufacturing company CFO.
Product Details :
- Series: Wiley Cost Management Series (Book 7)
- Hardcover: 240 pages
- Publisher: Wiley; 1 edition (October 12, 2001)
- Language: English
- ISBN-10: 0471415359
- ISBN-13: 978-0471415350
- Product Dimensions: 0.7 x 6.5 x 9.4 inches
More Details about Pricing for Profitability: Activity-Based Pricing for Competitive Advantage, 1st Edition
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