Pricing and Profitability Management : A Practical Guide for Business Leaders

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  • Edition: 1st
  • Format: Hardcover
  • Copyright: 2011-07-12
  • Publisher: Wiley
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Pricing as a discipline and a management tool has evolved in recent years, and both the tools themselves and the organizations that use them have grown in sophistication. A comprehensive reference book for all competencies in Pricing and Profitability Management is needed for businesses to understand the right approach, tools, and techniques for each focus area, as well as the integration across all focus areas. The Deloitte Handbook of Pricing and Profitability Management will serve as a "how to" manual for any executive or manager to develop and integrate the capabilities required for effective Price Management. The Handbook will address how to build these capabilities to a level of sophistication that is appropriate for his or her organization. It will present a holistic, comprehensive framework that reflects our belief that companies that integrate the six key pricing competencies into a cohesive pricing and profitability management program can realize gains far beyond what can be achieved with a singular approach. By taking a comprehensive view of pricing, companies can position themselves to tap a vast source of shareholder value: the ability to set and enforce profitable prices, not just once, but again and again in response to marketplace changes and evolving business needs.

Author Biography

An international business consultant with Deloitte Consulting, Julie Meehan focuses on strategy development and operational improvement, including profit enhancement through pricing. She helps clients in diverse industries develop pricing and sales channel strategies, improve price execution, redesign pricing processes in Marketing, Sales, and Finance, and perform in-depth analytics to remedy issues of poor profitability. She frequently speaks on pricing at professional conferences and teaches at top U.S. MBA programs. Julie currently lives in Savannah, Georgia, with her husband and identical twin sons.

Mike Simonetto is the founder and global leader of Deloitte’s Pricing and Profitability Management Practice. He guest lectures at a number of leading graduate schools and international pricing seminars and has published numerous articles on pricing. He is an adjunct instructor for the Executive MBA Program at the University of North Carolina, Chapel Hill, spent a year managing a leading pricing software firm, and sits on the Advisory Board for the Professional Pricing Society. Mike currently resides in Atlanta, Georgia, with his wife Theresa, and spends whatever time he can in the mountains of North Carolina.

Larry Montan, Jr. is a director with Deloitte Consulting. His love of pricing takes him from the frozen tundra of Minnesota (where he was born and bred) to companies around the world to help them with the “soft side” of pricing. The soft side of pricing includes important capabilities such as developing strong pricing leadership, organizing people into high-performing pricing teams, building pricing skills, and helping the organization embrace the new discipline of pricing. Larry is a frequent presenter with the Professional Pricing Society.

Chris Goodin’s passion for the success of his clients—a diverse, global mix of leading retail and consumer goods companies—finds its foundation in a remarkably common pursuit: driving more profitable top-line sales growth. He helps companies improve their bottom line through advanced analytics, innovative pricing strategies, and smartly conceived pricing tactics. In addition to his work as a principal with Deloitte Consulting, Chris frequently speaks at industry conferences and lectures at Columbia University and Duke University. He resides in Chagrin Falls, Ohio, with his wife and three children.

Table of Contents

Forewordp. xi
Acknowledgmentsp. xv
Introduction to Pricing and Profitability Managementp. 1
Pricing: The Critical Lever for Raising Performancep. 2
Common Obstacles to Pricing and Profitability Managementp. 5
Understanding-and Leveraging-the Human Side of Pricingp. 9
An Integrated Approach to Pricing: The Six Core Competenciesp. 11
Beginning the Journey: Key Questions to Askp. 16
Conducting a Pricing and Profitability Diagnosticp. 23
The Case for a Diagnosticp. 24
How to Execute a Diagnosticp. 26
Consolidating Findings and Identifying Opportunities to improve Capabilitiesp. 34
Challenges and Considerationsp. 38
Developing an Effective Pricing Strategyp. 41
What Comprises a Successful Pricing Strategy?p. 41
How to Make Value Your Focus-and Whyp. 45
Formulating a Value-Based Pricing Strategyp. 48
Designing and Integrating an Effective Pricing Structurep. 68
Identifying and Using the Principal Pricing Archetypesp. 72
Critical Challenges Faced by Pricing Strategistsp. 82
Tips for Moving Forwardp. 85
Price Executionp. 89
What Is Price Execution?p. 90
Using the Best-Practice Pricing Process Frameworkp. 91
Setting Policies to Reinforce Pricing Processesp. 123
Tips for Moving Forwardp. 134
Advanced Analytics and Price Settingp. 137
Building a Transaction-Level Data Setp. 138
Conducting Transactional Profitability Assessmentsp. 140
Integrating Cluster Analyses to Segment Customers, Products, and Servicesp. 163
Assessing the Competition: Value Equivalency Analyticsp. 163
Demand-Based Optimization Modeling to Improve Price Settingp. 167
Tips for Moving Forwardp. 178
Achieving Effective Organizational Alignment and Governancep. 183
Five Key Components for Aligning a Pricing Organizationp. 184
Aligning Sales to Support Pricing and Profitability Goalsp. 185
Identifying and Empowering Pricing Leadersp. 192
Designing Robust Organizational and Governance Structuresp. 197
Implementing Change Management and Adoption Processesp. 204
Evaluating and Managing Pricing Talentp. 215
Making the Organizational Commitment to Changep. 223
Pricing Technology and Data Managementp. 225
What Is Pricing Software?p. 226
The History of the Pricing Software Marketp. 232
Building a Business Case for Pricing Technologyp. 238
Selecting Pricing Management Softwarep. 243
The Pricing Software Development Lifecyclep. 249
Future Trends in Pricing Technologyp. 252
Pricing Technology Selection and Implementation Recommendationsp. 255
Integrating Tax and Regulatory Policies with the Pricing Strategyp. 257
The Convergence of Tax and Pricing Strategyp. 258
How to Integrate Pricing and Tax Functions-and Whyp. 262
Managing Pricing and Compliance Costs to Maximize Returnsp. 276
Navigating Regulatory Environments When Making Pricing Decisionsp. 279
Where to Go from Here?p. 281
Pricing as a Sustainable Competitive Advantagep. 285
Why Taking a Holistic Approach to Pricing Mattersp. 285
Bringing it All Together: A Case Studyp. 287
Emerging Trends in Pricing and Profitability Managementp. 294
Lessons Learned: Getting Pricing on the Executive Agendap. 298
Appendix What Is Value and Why Is It So Difficult to Measure?p. 301
Indexp. 305
Table of Contents provided by Ingram. All Rights Reserved.

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