Customer Review

2 of 2 people found the following review helpful
5.0 out of 5 stars A Great Overview of Pricing for Customer Value, 23 Jun 2009
Verified Purchase(What is this?)
This review is from: Pricing on Purpose: Creating and Capturing Value (Hardcover)
It is not often you can recommend a business book for its literary quality, but Ron Baker's "Pricing on Purpose" is exceedingly well written, and stuffed with quotations from a wealth of sources - from Thomas Paine to Karl Marx, via Adam Smith, Peter Drucker and Pope John Paul II. In superbly argued and widely referenced form, Mr Baker trashes the concept of cost-plus pricing - "The customer simply does not care how long it took General Motors to build his or her car" - showing that cost-plus pricing is never profit maximising: leading, as it does, to under-pricing in strong markets (where resource utilisation is high); and over-pricing in weak markets where utilisation is lower; - hardly a profit maximising strategy !

In fact the profit maximising price is the one which most closely relates to customer value. Customer value is, of course, subjective and individual to each buyer - based on the buyer's needs, wants and preferences at that particular time. This means that, when a customer changes their needs, wants or preferences, the value to them of goods and services changes - regardless of the cost of production.

Thus there are no "easy" solutions to the question of pricing and Mr Baker offers none. Instead he suggests close communication with the top 20% of customers to identify what drives "value" for them. Sadly however, he gives us little guidance on how to analyse and quantify that value, or how to establish a profitable pricing policy. Perhaps Mr Baker feels this is the domain of other books (he gives an extensive reading list) but I think an overview chapter on these topics would be most valuable.

You could also, perhaps, criticise Mr Baker for his slightly long-winded style, with frequent diversions from the core subject. Personally, I enjoy his erudite style, and these diversions are mostly interesting and informative.

This is a great book and one which every accountant in business should study. It will pull your focus from purely managing costs and onto delivering different "value propositions" to different customers. Measuring and capturing that "value" is the challenge, and one which the book does not fully deliver on. Nevertheless, if you are involved in business decisions which, in any way, might affect customer value, you should read this book.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No

Be the first person to comment on this review.

[Add comment]
Post a comment
To insert a product link use the format: [[ASIN:ASIN product-title]] (What's this?)
Amazon will display this name with all your submissions, including reviews and discussion posts. (Learn more)
Name:
Badge:
This badge will be assigned to you and will appear along with your name.
There was an error. Please try again.
Please see the full guidelines ">here.

Official Comment

As a representative of this product you can post one Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
The following name and badge will be shown with this comment:
 (edit name)
After clicking on the Post button you will be asked to create your public name, which will be shown with all your contributions.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.  Learn more
Otherwise, you can still post a regular comment on this review.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
 
System timed out

We were unable to verify whether you represent the product. Please try again later, or retry now. Otherwise you can post a regular comment.

Since you previously posted an Official Comment, this comment will appear in the comment section below. You also have the option to edit your Official Comment.   Learn more
The maximum number of Official Comments have been posted. This comment will appear in the comment section below.   Learn more
Prompts for sign-in
 


Review Details

Item

4.9 out of 5 stars (8 customer reviews)
5 star:
 (7)
4 star:
 (1)
3 star:    (0)
2 star:    (0)
1 star:    (0)
 
 
 
52.50 42.31
Add to basket Add to wishlist
Reviewer

Mr. Ross Maynard
(VINE VOICE)    (REAL NAME)   

Location: Glasgow, Scotland

Top Reviewer Ranking: 2,152