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Confessions of the Pricing Man: How Price Affects Everything
The world s foremost expert on pricing strategy shows how this mysterious process works and how to maximize value through pricing to company and customer.
In all walks of life, we constantly make decisions about whether something is worth our money or our time, or try to convince others to part with their money or their time. Price is the place where value and money meet. From the global release of the latest electronic gadget to the bewildering gyrations of oil futures to markdowns at the bargain store, price is the most powerful and pervasive economic force in our day-to-day lives and one of the least understood.
The recipe for successful pricing often sounds like an exotic cocktail, with equal parts psychology, economics, strategy, tools and incentives stirred up together, usually with just enough math to sour the taste. That leads managers to water down the drink with hunches and rules of thumb, or leave out the parts with which they don t feel comfortable. While this makes for a sweeter drink, it often lacks the punch to have an impact on the customer or on the business.
It doesn t have to be that way, though, as Hermann Simon illustrates through dozens of stories collected over four decades in the trenches and behind the scenes. A world-renowned speaker on pricing and a trusted advisor to Fortune 500 executives, Simon s lifelong journey has taken him from rural farmers markets, to a distinguished academic career, to a long second career as an entrepreneur and management consultant to companies large and small throughout the world. Along the way, he has learned from Nobel Prize winners and leading management gurus, and helped countless managers and executives use pricing as a way to create new markets, grow their businesses and gain a sustained competitive advantage. He also learned some tough personal lessons about value, how people perceive it, and how people profit from it.
In this engaging and practical narrative, Simon leaves nothing out of the pricing cocktail, but still makes it go down smoothly and leaves you wanting to learn more and do more as a consumer or as a business person. You will never look at pricing the same way again.
"
In all walks of life, we constantly make decisions about whether something is worth our money or our time, or try to convince others to part with their money or their time. Price is the place where value and money meet. From the global release of the latest electronic gadget to the bewildering gyrations of oil futures to markdowns at the bargain store, price is the most powerful and pervasive economic force in our day-to-day lives and one of the least understood.
The recipe for successful pricing often sounds like an exotic cocktail, with equal parts psychology, economics, strategy, tools and incentives stirred up together, usually with just enough math to sour the taste. That leads managers to water down the drink with hunches and rules of thumb, or leave out the parts with which they don t feel comfortable. While this makes for a sweeter drink, it often lacks the punch to have an impact on the customer or on the business.
It doesn t have to be that way, though, as Hermann Simon illustrates through dozens of stories collected over four decades in the trenches and behind the scenes. A world-renowned speaker on pricing and a trusted advisor to Fortune 500 executives, Simon s lifelong journey has taken him from rural farmers markets, to a distinguished academic career, to a long second career as an entrepreneur and management consultant to companies large and small throughout the world. Along the way, he has learned from Nobel Prize winners and leading management gurus, and helped countless managers and executives use pricing as a way to create new markets, grow their businesses and gain a sustained competitive advantage. He also learned some tough personal lessons about value, how people perceive it, and how people profit from it.
In this engaging and practical narrative, Simon leaves nothing out of the pricing cocktail, but still makes it go down smoothly and leaves you wanting to learn more and do more as a consumer or as a business person. You will never look at pricing the same way again.
"
236 pages, Paperback
First published October 21, 2015
403 people are currently reading
2524 people want to read
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Displaying 1 - 30 of 61 reviews
January 2, 2023
This is a MUST read for CEOs, C-level decision makers and board professionals. Pricing is a way too little understood topic among business professionals.
The number one takeaway in this book is to always lead company with profits in mind. Not because of greediness, but because profit is a means survival. And pricing is the easiest, and many times, a powerful way to influence profits. Especially many big corporations and their sales executives are incentivized to care about market share. This typically leads to large discount campaigns and price wars, and ultimately bankruptcies.
The book is pragmatical. You don’t need to have any previous understanding on the topic. There are plenty of real life case examples how certain pricing changes either made a company to thrive or destroyed it. Extremely interesting read.
I recommend to read this book few weeks before you are actually performing some price design or changes in your company to get most out of it. I got plenty of actionable takeaways to implement into the pricing structure of my company .
The number one takeaway in this book is to always lead company with profits in mind. Not because of greediness, but because profit is a means survival. And pricing is the easiest, and many times, a powerful way to influence profits. Especially many big corporations and their sales executives are incentivized to care about market share. This typically leads to large discount campaigns and price wars, and ultimately bankruptcies.
The book is pragmatical. You don’t need to have any previous understanding on the topic. There are plenty of real life case examples how certain pricing changes either made a company to thrive or destroyed it. Extremely interesting read.
I recommend to read this book few weeks before you are actually performing some price design or changes in your company to get most out of it. I got plenty of actionable takeaways to implement into the pricing structure of my company .
June 4, 2017
I'm always enjoing reading this kind of books where the whole world is viewed through the lenses, and this book views all the world of marketing, sales, business development through the lenses of pricing and prices management. From pricing as the most accessible marketing and sales improvements method to the pricing vs profits, bundles, unbundling, pay-per-use, subscription, freemium, price testing, pricing during crisis, floating prices, prices vs time, low and high prices, price structure, price differention
main lessons from this book:
- price is the ultimate profit driver and market share is not always means good profits
- price is the perception of the product
- price changes should be aligned with profits, volume and a breakeven point
- low pricing is a dangerous game
- innovations in pricing exist but they should be approved by customers
main lessons from this book:
- price is the ultimate profit driver and market share is not always means good profits
- price is the perception of the product
- price changes should be aligned with profits, volume and a breakeven point
- low pricing is a dangerous game
- innovations in pricing exist but they should be approved by customers
This entire review has been hidden because of spoilers.
September 2, 2018
There are 3 parts of this book:
- examples of very simple pricing strategies which covers the intuitional and well-known knowledge,
- a part which looks like a manual for microeconomy - includes theories which are boring, utopian and sometimes tough to read (like many theories) but help paint important concepts,
- the last part about more advanced approaches to pricing with plenty excellent case studies and business examples.
Confessions of the Pricing Man shows how relevant the pricing is in each business and underlines that at the end of the day even "the most customer oriented and innovative companies" must add up in the boring Excel. Business without a close look at hard numbers won't be as profitable as it could be.
- examples of very simple pricing strategies which covers the intuitional and well-known knowledge,
- a part which looks like a manual for microeconomy - includes theories which are boring, utopian and sometimes tough to read (like many theories) but help paint important concepts,
- the last part about more advanced approaches to pricing with plenty excellent case studies and business examples.
Confessions of the Pricing Man shows how relevant the pricing is in each business and underlines that at the end of the day even "the most customer oriented and innovative companies" must add up in the boring Excel. Business without a close look at hard numbers won't be as profitable as it could be.
September 27, 2017
Very interesting piece! I've read few books about pricing, but mostly from psychological ("Irrational Customer", "Priceless" or all behavioral economics books) or very technical ("Price Advantage" etc.) perspective. This book, however, is a solid monography and shows basic principles of how you should price your product. You won't become pricing expert after reading it, but it may change the way you look at prices, profit margins and price/value of products. It made me more interested in the topic than before.
Strongly recommended!
Strongly recommended!
April 22, 2018
A friend has borrowed me this book - it's a great introduction to pricing. (Dzięki Maciej!) A must-read for marketing and sales executives. We've been conducting price management projects for clients in Casbeg before I've read it, but now we will probably do even more of those.
January 27, 2024
Probably the most ridiculous title ever for a business book, Confessions of the Pricing Man is actually a remarkably useful book about pricing and packaging. (The original German title, Preisheiten: Alles, was Sie über Preise wissen mussen or "Units of pricing: Everything you need to know about pricing" should have just been retained.) Hermann Simon is the co-founder of Simon-Kucher Partners, one of the world's leading consulting firms focused solely on pricing, with which I had the pleasure of working on a project while at my previous company. Their research deliverables were top-notch (of course, you'll pay dearly for it) so it's not unsurprising to find that their methodologies and suggestions are grounded in both classical and behavioral economics, with a nod to Amos Tversky.
Confessions of the Pricing Man is very academic and dry, given Simon's background as an economist, but for being such a specialized text, it is relatively readable and accessible. Its information density is high, and thus it's a lot to take in, but lessons such as "business success comes from maximization of profit, not market share" should be drilled into executives more often. Simon is unabashedly a capitalist, but not one in pursuit of short-term results, and not one to use pricing purely for one-sided extractive capitalism. Instead he prefers to see pricing as a mechanism to quantify mutual benefit between customer and vendor; it's possible to have higher margins while also delivering goods and services to customers in ways they prefer, hence the rise of the subscription economy (as coined by Tien Tzuo of Zuora).
Overall, I'm glad I pushed through this book, as I'm in the middle of a pricing and packaging project and this gives me at least enough basic fluency in the discipline to understand the range of possible options that we should be considering.
Confessions of the Pricing Man is very academic and dry, given Simon's background as an economist, but for being such a specialized text, it is relatively readable and accessible. Its information density is high, and thus it's a lot to take in, but lessons such as "business success comes from maximization of profit, not market share" should be drilled into executives more often. Simon is unabashedly a capitalist, but not one in pursuit of short-term results, and not one to use pricing purely for one-sided extractive capitalism. Instead he prefers to see pricing as a mechanism to quantify mutual benefit between customer and vendor; it's possible to have higher margins while also delivering goods and services to customers in ways they prefer, hence the rise of the subscription economy (as coined by Tien Tzuo of Zuora).
Overall, I'm glad I pushed through this book, as I'm in the middle of a pricing and packaging project and this gives me at least enough basic fluency in the discipline to understand the range of possible options that we should be considering.
December 24, 2023
Highly recommended! Easy to read and comprehend! The examples used are so common and all around us but we rarely make an effort to understand the logic behind certain prices. Next time I browse for products and compare prices, I would know exactly what and why behind it!
A rare non fiction book that got me excited right from the start!
A rare non fiction book that got me excited right from the start!
October 1, 2020
Awesome entry read for someone interested in the field of pricing or economics. Explains basic economic concepts and provides with real world examples.
November 1, 2021
Brilliant book on how to set prices--and the underestimated impact of pricing choices. It's fairly technical, but it is written really well with stories and engaging language. For CEO's this is a must read (yes, he makes the very strong case that pricing should not be delegated to the point where the CEO isn't involved in that decision).
Couple of nuggets:
You can improve profitability far easier by adjusting prices that you can by cutting costs or gaining market share.
He showed with some compelling calculations that when you have a production cost decrease, to maximize profit, you should split that gain 50/50 with your customers (e.g. $10 reduction in production per unit means $5 reduction in customer cost).
Price wars rarely end up with a single market leader who has driven all the other companies out of the space. The vast majority of the time, every company gets involved and in the end all you do is cut margins for the entire industry.
Couple of nuggets:
You can improve profitability far easier by adjusting prices that you can by cutting costs or gaining market share.
He showed with some compelling calculations that when you have a production cost decrease, to maximize profit, you should split that gain 50/50 with your customers (e.g. $10 reduction in production per unit means $5 reduction in customer cost).
Price wars rarely end up with a single market leader who has driven all the other companies out of the space. The vast majority of the time, every company gets involved and in the end all you do is cut margins for the entire industry.
October 17, 2020
H.Simon provides a clear overview of the pricing world, discussing common pricing strategies, the pros and cons of each, along with useful case studies. Unfortunately the book was written before the dawn of data science and pricing algorithms, so the there is no meaningful discussion of how they can (or should) be used. There is a great chapter on behavioural science (the psychology of pricing), although by dispensing with the research in a dedicated chapter, Simon proceeds to ignore its applications in the topics for the remainder of the book.
Overall, it’s a good introduction to pricing strategy, but will leave you wanting more for modern day applications and how to apply it in roles outside the C-suite.
Overall, it’s a good introduction to pricing strategy, but will leave you wanting more for modern day applications and how to apply it in roles outside the C-suite.
March 27, 2021
Keep in mind this is a business book with a dramatic black and white photo of the author on the cover. And these are not just the confessions of A pricing man: they're from THE pricing man. That continues throughout the book, especially early on, with lots of references to fancy hotels, first class flights and the knowing of top CEOs.
But once you get past it, it's indeed a concise, fairly actionable and eye opening book about the role of pricing in so many industries, and the surprising level to which pricing is ignored as a positive lever.
The Pricing Man oversimplifies the process of creating a demand curve, which still seems wholly unattainable for someone like me (in a tech startup) and is somewhat foundational for many of the strategies he outlines. That said, there are still plenty of nuggets to work with, and an overall framing which should make your pricing decisions organically more informed.
But once you get past it, it's indeed a concise, fairly actionable and eye opening book about the role of pricing in so many industries, and the surprising level to which pricing is ignored as a positive lever.
The Pricing Man oversimplifies the process of creating a demand curve, which still seems wholly unattainable for someone like me (in a tech startup) and is somewhat foundational for many of the strategies he outlines. That said, there are still plenty of nuggets to work with, and an overall framing which should make your pricing decisions organically more informed.
March 5, 2018
Fascinating behind the scenes view behind everyday prices we take for granted.
November 25, 2024
In essence, the thesis of the book can be summarized by the author in the very beginning of the book, which is that the price of any product should be the value the customer believes the item is worth. Not anything more, or anything less.
For instance, Coca-Cola is in essence just carbonated sugar water. However, it could command a high premium over its cost of production because the value customers receive is much higher than the cost.
Price should be seen as a communication tool. Customers often don’t have time to read through all the descriptions of the product, and price is one thing that translates throughout different products. A well priced item gives customers an instant understanding of what this product is like. With that in mind, my two biggest takeaways from the books are:
Price is optionality
Take Amazon Prime for example. For a fixed cost per year, the customer has the option to have any prime eligible product shipped within 2 business days. If the customer purchases no item for the year, the prime membership cost is still charged. In essence, the membership fee is an optionality fee for the customer - a piece of mind, if you will. Which means that there will be customers who will never get their money worth through prime membership - and the reverse is still true.
Even though seemingly on paper, customers who have prime but rarely buy any products on Amazon seemed to be losing money and making illogical decisions. In reality is that the optionality itself in fact has value. By giving customers such optionality, Amazon is able to capture the seemingly invisible value that otherwise would be forgone.
Price communicates quality, worth and prestidge
The old saying of “you get what you pay for” is very often embedded in every customer’s brain. The reality is that no one has that much time to study the differentiation between seemingly identical products. Thus, they will always “cheat” a little bit by internalizing that cheaper product usually means lower quality, and more expensive product usually means higher quality. Yet, such internalization is often correct. Because the seemingly “luxury” products, even if they’re merely marginally better than much cheaper products, are indeed often slightly better in quality - even if the price bump doesn't justify it.
One of the examples I’ll give would be Apple’s pricing structure for its products. Any tech geeks will very quickly point out that Apple’s pricing structure for most of its products are very steep: the entry level products are often very sufficient enough for vast majorities of their users. However, the mid and higher level products are significantly steeper in terms of its price-per-value calculation. Yet time and time again, what Apple discovered was that its customers actually preferred to pay for the most expensive device in their product line. Even though the value per device equation shows that the rational customer should pay for many entry level products (and chances are their needs would be sufficiently fulfilled by the entry level product).
Why do their customers do that? Because - I believe, and also the author wrote in the book - that the vast majority of Apple customers are not tech geeks. They associate higher pricing with higher quality, higher worth and higher prestige products: and they’re not nearly wrong. By having such a high range of product lines (for instance, the new M4 Apple Mini, as I type, price range spans from entry level $599 all the way to 3 times of the entry level pricing), Apple could efficiently target various kinds of customers by essentially offering the same products. This is obviously sheer brilliance.
Others: Moat
This book also taught me many other things. As a value investor, the first thing I have to ask when reading an annual report would be, does this company have pricing power? Does it have a moat (funny enough, the author also references Warren Buffett in the book)? The book’s main idea is that, when a company develops its product, at the very core inception, they should already think about how to price their product to have a moat. Once again, Apple products are usually much more expensive than their competitors because Apple is known to have great design, great user experience and sufficient horsepower. Something customers could rely upon readily. With that in mind, Apple could differentiate itself and spend more on R&D, more on production time to maintain their moat. Their premium pricing sets them apart from their competitors.
Apple’s competitors - ranging from China’s Xiaomi Group to BBK Group, to Korea’s Samsung - can’t effectively differentiate themselves because essentially Apple’s competitors are selling commodities. Items that customers would have a hard time to tell the difference - even for the technological savvy.
However, if Apple’s competitors are more savvy, they might have otherwise decided not to compete against others in such a crowded market.
For instance, Coca-Cola is in essence just carbonated sugar water. However, it could command a high premium over its cost of production because the value customers receive is much higher than the cost.
Price should be seen as a communication tool. Customers often don’t have time to read through all the descriptions of the product, and price is one thing that translates throughout different products. A well priced item gives customers an instant understanding of what this product is like. With that in mind, my two biggest takeaways from the books are:
Price is optionality
Take Amazon Prime for example. For a fixed cost per year, the customer has the option to have any prime eligible product shipped within 2 business days. If the customer purchases no item for the year, the prime membership cost is still charged. In essence, the membership fee is an optionality fee for the customer - a piece of mind, if you will. Which means that there will be customers who will never get their money worth through prime membership - and the reverse is still true.
Even though seemingly on paper, customers who have prime but rarely buy any products on Amazon seemed to be losing money and making illogical decisions. In reality is that the optionality itself in fact has value. By giving customers such optionality, Amazon is able to capture the seemingly invisible value that otherwise would be forgone.
Price communicates quality, worth and prestidge
The old saying of “you get what you pay for” is very often embedded in every customer’s brain. The reality is that no one has that much time to study the differentiation between seemingly identical products. Thus, they will always “cheat” a little bit by internalizing that cheaper product usually means lower quality, and more expensive product usually means higher quality. Yet, such internalization is often correct. Because the seemingly “luxury” products, even if they’re merely marginally better than much cheaper products, are indeed often slightly better in quality - even if the price bump doesn't justify it.
One of the examples I’ll give would be Apple’s pricing structure for its products. Any tech geeks will very quickly point out that Apple’s pricing structure for most of its products are very steep: the entry level products are often very sufficient enough for vast majorities of their users. However, the mid and higher level products are significantly steeper in terms of its price-per-value calculation. Yet time and time again, what Apple discovered was that its customers actually preferred to pay for the most expensive device in their product line. Even though the value per device equation shows that the rational customer should pay for many entry level products (and chances are their needs would be sufficiently fulfilled by the entry level product).
Why do their customers do that? Because - I believe, and also the author wrote in the book - that the vast majority of Apple customers are not tech geeks. They associate higher pricing with higher quality, higher worth and higher prestige products: and they’re not nearly wrong. By having such a high range of product lines (for instance, the new M4 Apple Mini, as I type, price range spans from entry level $599 all the way to 3 times of the entry level pricing), Apple could efficiently target various kinds of customers by essentially offering the same products. This is obviously sheer brilliance.
Others: Moat
This book also taught me many other things. As a value investor, the first thing I have to ask when reading an annual report would be, does this company have pricing power? Does it have a moat (funny enough, the author also references Warren Buffett in the book)? The book’s main idea is that, when a company develops its product, at the very core inception, they should already think about how to price their product to have a moat. Once again, Apple products are usually much more expensive than their competitors because Apple is known to have great design, great user experience and sufficient horsepower. Something customers could rely upon readily. With that in mind, Apple could differentiate itself and spend more on R&D, more on production time to maintain their moat. Their premium pricing sets them apart from their competitors.
Apple’s competitors - ranging from China’s Xiaomi Group to BBK Group, to Korea’s Samsung - can’t effectively differentiate themselves because essentially Apple’s competitors are selling commodities. Items that customers would have a hard time to tell the difference - even for the technological savvy.
However, if Apple’s competitors are more savvy, they might have otherwise decided not to compete against others in such a crowded market.
September 29, 2018
Every CEO or Business owner MUST read this book!
Price is one of the variables that can completely change the course of a business (for good or bad) yet it is the variable that gets the least attention.
Hermann Simon has been a pioneer and leader in the pricing industry for decades and here he shares, in a concise way, the most valuable and actionable insights.
My biggest takeaway is that no matter the industry you operate in, the size of your business, or the business model you implement, you should invest some time in understanding the pricing dynamics surrounding your business ecosystem and creating models to maximize value using pricing strategies and tactics.
Some of my highlights:
"Companies with dedicated pricing departments had 24% more pricing power than companies without such departments."
"In other words, the pain we feel from a loss is greater than the happiness we feel from a gain, even if the magnitude of the loss and gain themselves is equal."
"Profit is ultimately the only valid metric for guiding your company. The rationale is simple: profit is the only metric which takes both the revenue side and the cost side of a business into account."
Price is one of the variables that can completely change the course of a business (for good or bad) yet it is the variable that gets the least attention.
Hermann Simon has been a pioneer and leader in the pricing industry for decades and here he shares, in a concise way, the most valuable and actionable insights.
My biggest takeaway is that no matter the industry you operate in, the size of your business, or the business model you implement, you should invest some time in understanding the pricing dynamics surrounding your business ecosystem and creating models to maximize value using pricing strategies and tactics.
Some of my highlights:
"Companies with dedicated pricing departments had 24% more pricing power than companies without such departments."
"In other words, the pain we feel from a loss is greater than the happiness we feel from a gain, even if the magnitude of the loss and gain themselves is equal."
"Profit is ultimately the only valid metric for guiding your company. The rationale is simple: profit is the only metric which takes both the revenue side and the cost side of a business into account."
February 22, 2017
كتاب ممتع وشيق وجميل . للاسف تفتقر المكتبة العربية لمثل هذه النوعية من الكتب وحتي لو تمت ترجمتها فانها ستفقد الكثير من قيمة المعلمة. بالرجوع للكتاب فقد وجدته مليئا بالمعلومات الشيقة والمثيرة عن دور الاسعار وقرارات التسعير في تحديد قيمة الشركة وارباحها وحتى مصيرها. كما يلفي الضوء على الاشكال المختلفة لتحديد الاسعار والحصول على اكبر قيمة ممكنة مقابل المنتجات والخدمات التي تقدمها الشركات.
انصح بقراءته وخصوصا للمدراء وصانعي القرار من مختلف المستويات بالاضافة الى موظفي المبيعات
انصح بقراءته وخصوصا للمدراء وصانعي القرار من مختلف المستويات بالاضافة الى موظفي المبيعات
January 2, 2017
Comprehensive, thorough, well-structured book about all things pricing - part management tome, part textbook. Should be read by anyone in sales, marketing, management, strategy, or consulting in any of these functions.
July 25, 2017
Unexpectedly remarkable. I'll recommend this to every entrepreneur I know.
September 8, 2020
(The English review is placed beneath the Russian one)
Книга станет хорошим дополнением к классической книге по маркетингу «Маркетинг. Менеджмент» Котлера или к последней версии книги «Принципы маркетинга» того же Котлера. Хотя, и это довольно важно, книга не рассматривает все вопросы, связанные с темой ценообразования. И поэтому я бы посоветовал прочитать вместе с этой книгой ещё и такие книги как «Кривая спроса. Как умные компании находят ценных клиентов» и «Эффективное ценообразование» Роберт Дж. Долан, Герман Саймон. Тем не менее, не стоит забывать, что книг по ценообразованию не так много, а хороших книг, и ещё меньше.
Я бы не сказал, что автор в своей книге рассматривает вопрос ценообразования со всех сторон, однако, даже не смотря на это, книга получилась всё же довольно полной (или относительно полной). Автор даёт неплохое описание того, на что отвечающий за цены сотрудник должен обращать внимание. К примеру, автор много пишет про нежелательность скидок. Я бы даже сказал, что это одна из самых больших тем книги. Несмотря на то, что я полностью согласен с мнением автора, всё же нужно заметить, что ничего нового в этом нет. Ещё классики маркетинга писали, какой ущерб в долгосрочный перспективе может нанести снижение цен или ввод различных скидок. И если автор особо подчёркивает тот факт, что вам потребуется продать намного больше товара, чтобы оправдать скидку, то классики маркетинга пишут больше о том вреде, который будет нанесён бренду.
Вторым плюсом книги я бы отметил огромное множество примеров из мира бизнеса, которые автор использует для иллюстрации своего видения. И тут есть одна проблема: автор часто использует истории из собственной практики. С одной стороны, в этом нет ничего предосудительного, а многие даже наоборот скажут, что истории из собственной практики только добавляют книге эксклюзивности. Но меня одолевало ощущение чуть ли не непрерывной рекламы. Т.е. чувство, что книга писалась ещё и в качестве PR-акции, рекламы собственной фирмы. Потому что отчётливо видно, что все эти чудесные решения в области ценообразования, т.е. проблемы, которые они решали своим клиентам, выглядят приторно сладко. Однако повторю, это не настолько плохо, не настолько бросается в глаза, чтобы можно было снизить оценку книги.
В третьих, у меня возникло ощущение, что в книге отсутствует структура (и это главный минус). Т.е. автор просто высказывает своё мнение (вперемешку с историями из своей практики), не пытаясь как-то всё это выстроить. Т.е. после прочтения не появляется ясной и чёткой картины, что и как делать. Конечно, это не учебник, но всё же было бы лучше, если автор лучше организовал книгу. Можно возразить на это, что целью книги было не обучить ценообразованию с нуля, а дополнить уже существующие знание. Возможно. Тем не менее, это больше напоминает очень долгий рассказ автора у себя дома, сидя за камином в кресле.
The book will be a useful addition to the classic book on marketing - "Marketing. Management" by Kotler or the latest version of Kotler's book "Principles of Marketing." Although, and this is quite important, the book does not address all issues related to the topic of pricing. And so I would advise reading with this book also such books as "The Curve: From Freeloaders into Superfans: The Future of Business" by Nicholas Lovell and "Power Pricing: How Managing Price Transforms the Bottom Line" by Robert J. Dolan, Robert J. Doan, Hermann Simon. However, we should not forget that there are not so many books on pricing, but even fewer good books.
I would not say that the author in his book looks at the issue of pricing from all sides, but even so, the book is quite broad (relatively). The author gives a pretty good description of what the person responsible for pricing should pay attention to. For example, the author writes a lot about undesirable discounts. I would even say that this is one of the major topics of the book. Despite the fact that I fully agree with the author, it should be noted that there is nothing new in it. Even the classics of marketing have written about the damage that can be caused by reducing prices or by introducing various discounts in the long term. And if the author emphasizes the fact that you will need to sell many more products to justify your discount, then the classics of marketing are writing more about the damage that will be done to the brand.
The second advantage of the book, I would point out the huge number of examples from the business world, which the author uses to illustrate his vision. And there is one problem: the author often uses stories from his own practice. On the one hand, there is nothing wrong with that, and many would even say that stories from one's own practice only add exclusivity to the book. But I was prevailed by the feeling of almost ceaseless advertising. That is, the feeling that the book was written as a PR-activities, advertising of his own company. Because it is visible that all these wonderful pricing solutions, i.e., the problems they solved for their clients are looked sickly sweet. But again, it's not so bad. It's not so noticeable that it could reduce the book's value.
Thirdly, I had the feeling that the book has no structure (and this is the main disadvantage). That is, the author just expresses his opinion (mixed with stories from his practice) without trying to organize it all somehow. That is, after reading, there is no distinct and clear picture of what to do and how to do it. Of course, it is not a textbook, but still, it would be better if the author had better organized the book. You can argue that the purpose of the book was not to teach pricing from scratch but to enhance existing knowledge. It's possible. However, it is more like a very long story of the author at home, sitting behind a fireplace in a chair.
Книга станет хорошим дополнением к классической книге по маркетингу «Маркетинг. Менеджмент» Котлера или к последней версии книги «Принципы маркетинга» того же Котлера. Хотя, и это довольно важно, книга не рассматривает все вопросы, связанные с темой ценообразования. И поэтому я бы посоветовал прочитать вместе с этой книгой ещё и такие книги как «Кривая спроса. Как умные компании находят ценных клиентов» и «Эффективное ценообразование» Роберт Дж. Долан, Герман Саймон. Тем не менее, не стоит забывать, что книг по ценообразованию не так много, а хороших книг, и ещё меньше.
Я бы не сказал, что автор в своей книге рассматривает вопрос ценообразования со всех сторон, однако, даже не смотря на это, книга получилась всё же довольно полной (или относительно полной). Автор даёт неплохое описание того, на что отвечающий за цены сотрудник должен обращать внимание. К примеру, автор много пишет про нежелательность скидок. Я бы даже сказал, что это одна из самых больших тем книги. Несмотря на то, что я полностью согласен с мнением автора, всё же нужно заметить, что ничего нового в этом нет. Ещё классики маркетинга писали, какой ущерб в долгосрочный перспективе может нанести снижение цен или ввод различных скидок. И если автор особо подчёркивает тот факт, что вам потребуется продать намного больше товара, чтобы оправдать скидку, то классики маркетинга пишут больше о том вреде, который будет нанесён бренду.
Вторым плюсом книги я бы отметил огромное множество примеров из мира бизнеса, которые автор использует для иллюстрации своего видения. И тут есть одна проблема: автор часто использует истории из собственной практики. С одной стороны, в этом нет ничего предосудительного, а многие даже наоборот скажут, что истории из собственной практики только добавляют книге эксклюзивности. Но меня одолевало ощущение чуть ли не непрерывной рекламы. Т.е. чувство, что книга писалась ещё и в качестве PR-акции, рекламы собственной фирмы. Потому что отчётливо видно, что все эти чудесные решения в области ценообразования, т.е. проблемы, которые они решали своим клиентам, выглядят приторно сладко. Однако повторю, это не настолько плохо, не настолько бросается в глаза, чтобы можно было снизить оценку книги.
В третьих, у меня возникло ощущение, что в книге отсутствует структура (и это главный минус). Т.е. автор просто высказывает своё мнение (вперемешку с историями из своей практики), не пытаясь как-то всё это выстроить. Т.е. после прочтения не появляется ясной и чёткой картины, что и как делать. Конечно, это не учебник, но всё же было бы лучше, если автор лучше организовал книгу. Можно возразить на это, что целью книги было не обучить ценообразованию с нуля, а дополнить уже существующие знание. Возможно. Тем не менее, это больше напоминает очень долгий рассказ автора у себя дома, сидя за камином в кресле.
The book will be a useful addition to the classic book on marketing - "Marketing. Management" by Kotler or the latest version of Kotler's book "Principles of Marketing." Although, and this is quite important, the book does not address all issues related to the topic of pricing. And so I would advise reading with this book also such books as "The Curve: From Freeloaders into Superfans: The Future of Business" by Nicholas Lovell and "Power Pricing: How Managing Price Transforms the Bottom Line" by Robert J. Dolan, Robert J. Doan, Hermann Simon. However, we should not forget that there are not so many books on pricing, but even fewer good books.
I would not say that the author in his book looks at the issue of pricing from all sides, but even so, the book is quite broad (relatively). The author gives a pretty good description of what the person responsible for pricing should pay attention to. For example, the author writes a lot about undesirable discounts. I would even say that this is one of the major topics of the book. Despite the fact that I fully agree with the author, it should be noted that there is nothing new in it. Even the classics of marketing have written about the damage that can be caused by reducing prices or by introducing various discounts in the long term. And if the author emphasizes the fact that you will need to sell many more products to justify your discount, then the classics of marketing are writing more about the damage that will be done to the brand.
The second advantage of the book, I would point out the huge number of examples from the business world, which the author uses to illustrate his vision. And there is one problem: the author often uses stories from his own practice. On the one hand, there is nothing wrong with that, and many would even say that stories from one's own practice only add exclusivity to the book. But I was prevailed by the feeling of almost ceaseless advertising. That is, the feeling that the book was written as a PR-activities, advertising of his own company. Because it is visible that all these wonderful pricing solutions, i.e., the problems they solved for their clients are looked sickly sweet. But again, it's not so bad. It's not so noticeable that it could reduce the book's value.
Thirdly, I had the feeling that the book has no structure (and this is the main disadvantage). That is, the author just expresses his opinion (mixed with stories from his practice) without trying to organize it all somehow. That is, after reading, there is no distinct and clear picture of what to do and how to do it. Of course, it is not a textbook, but still, it would be better if the author had better organized the book. You can argue that the purpose of the book was not to teach pricing from scratch but to enhance existing knowledge. It's possible. However, it is more like a very long story of the author at home, sitting behind a fireplace in a chair.
May 29, 2025
Sooner or later, profit is the only accurate metric to use for guiding your business and there are only 3 ways to influence profit: Volume, cost and price.
Some practical case studies from this book thay I found interesting to gain profits by influencing on price:
1️⃣ Behavioral Pricing in Action
The Economist magazine ran an experiment where it offered:
▪️Online-only: $59
▪️Print-only: $125
▪️Online + Print: $125
Almost everyone picked the third option because the second acted as a decoy 😂
👉 How you frame pricing choices changes buying behavior.
2️⃣ Global Pricing Must Be Localized
IKEA localizes prices aggressively. A wardrobe might be $150 in Germany, but only $70 in Poland due to purchasing power and competition— even though it’s the same product.
👉 International pricing is not “one-size-fits-all.” Adapt to local willingness to pay.
3️⃣ A subtle price increase
A German brewery wanted to raise prices but was afraid of losing loyal customers. Instead of directly increasing the price per bottle, they:
▪️Changed the packaging to a premium look
▪️Slightly increased the volume
▪️Reframed the message as: “Improved recipe, better taste”
Result: The price went up without customer resistance.
👉 Lesson: Don’t raise prices bluntly — repackage the value so that customers feel it’s worth it.
4️⃣ Lufthansa Airlines – Dynamic and Segmented Pricing
Airlines operate in a cost-intensive environment with fluctuating fuel prices, high competition from low-cost carriers, heavy pressure on margins,... In such conditions, Lufthansa took a more strategic, segmented approach to pricing:
▪️Fare Class Segmentation (Unbundling the Seat): Instead of just offering “economy” and “business”, Lufthansa deconstructed the ticket and repackaged it into multiple fare classes. 👉This captures consumer surplus without requiring different products.
▪️Lufthansa tailored offerings for corporate clients, with: Annual volume-based pricing agreements; Priority support; Flexible changes; Upgrade vouchers;...
▪️Let customers self-select add-ons instead of bundling everything: extra baggage, seat selection, Wi-Fi on board. 👉 Ancillary services now contribute 25–35% of revenue per passenger on many routes.
Although these pricing strategies are pretty common in airline industry nowadays, those initiatives were implemented in Lufthansa Airlines in the 1900s!
☀️ In summary, each chapter is designed to demonstrate a different dimension of pricing — economic, psychological, strategic, and operational — across both B2C and B2B industries. "If you can quantify value and segment your market properly, you can charge more — and your customers will happily pay it.”
Some practical case studies from this book thay I found interesting to gain profits by influencing on price:
1️⃣ Behavioral Pricing in Action
The Economist magazine ran an experiment where it offered:
▪️Online-only: $59
▪️Print-only: $125
▪️Online + Print: $125
Almost everyone picked the third option because the second acted as a decoy 😂
👉 How you frame pricing choices changes buying behavior.
2️⃣ Global Pricing Must Be Localized
IKEA localizes prices aggressively. A wardrobe might be $150 in Germany, but only $70 in Poland due to purchasing power and competition— even though it’s the same product.
👉 International pricing is not “one-size-fits-all.” Adapt to local willingness to pay.
3️⃣ A subtle price increase
A German brewery wanted to raise prices but was afraid of losing loyal customers. Instead of directly increasing the price per bottle, they:
▪️Changed the packaging to a premium look
▪️Slightly increased the volume
▪️Reframed the message as: “Improved recipe, better taste”
Result: The price went up without customer resistance.
👉 Lesson: Don’t raise prices bluntly — repackage the value so that customers feel it’s worth it.
4️⃣ Lufthansa Airlines – Dynamic and Segmented Pricing
Airlines operate in a cost-intensive environment with fluctuating fuel prices, high competition from low-cost carriers, heavy pressure on margins,... In such conditions, Lufthansa took a more strategic, segmented approach to pricing:
▪️Fare Class Segmentation (Unbundling the Seat): Instead of just offering “economy” and “business”, Lufthansa deconstructed the ticket and repackaged it into multiple fare classes. 👉This captures consumer surplus without requiring different products.
▪️Lufthansa tailored offerings for corporate clients, with: Annual volume-based pricing agreements; Priority support; Flexible changes; Upgrade vouchers;...
▪️Let customers self-select add-ons instead of bundling everything: extra baggage, seat selection, Wi-Fi on board. 👉 Ancillary services now contribute 25–35% of revenue per passenger on many routes.
Although these pricing strategies are pretty common in airline industry nowadays, those initiatives were implemented in Lufthansa Airlines in the 1900s!
☀️ In summary, each chapter is designed to demonstrate a different dimension of pricing — economic, psychological, strategic, and operational — across both B2C and B2B industries. "If you can quantify value and segment your market properly, you can charge more — and your customers will happily pay it.”
October 21, 2019
Every manager, investor and business owner needs to read this book ; it's that good.
Written in the style of the landmark book Confessions of an Advertising Man, and borrowing a part of that book's title, this is a well-done yet straightforward accounting of pricing strategy and revenue management.
What we know as business managers or business owners is intrinsically true: pricing exerts the strongest force on profitability. The author makes the point, convincingly so, that it's easier to believe cost-cutting is the way to boosting profits, but his credible background and simple examples demonstrate clearly that one must understand the demand curve of your market (or what your about to invest into or manage) and manage pricing better to achieve the most profitable outcome. Similarly, understanding the elasticity for your goods doesn't take a microeconomist - he demonstrates the simplified method which is just as effective of calculating this and determining optimal price points for profit maximization.
I'm so glad he explores a debate in which he terms "profit square vs. profit triangle." There is a price point that will reach optimum profitability to a single market (calculable). But how do you maximize that when your good or service has a variable diminishing marginal utility, depending on the segment? He explores this and shares the danger of trying perhaps too hard to exploit the maximum profit at any given market for a good or service where multiple segments are served. He demonstrates effective fencing strategies as well as strategies which are commonly used and illustrates how (and why) some just don't work.
Bravo! This is perhaps one of the best books written in my lifetime. It offers more insight than 30 books do on the same subject (revenue management and pricing) and does so in an easy enough to understand way that even the owner of a hot dog stand, a stock investor, or a business manager at a lower level will find easy to understand.
Written in the style of the landmark book Confessions of an Advertising Man, and borrowing a part of that book's title, this is a well-done yet straightforward accounting of pricing strategy and revenue management.
What we know as business managers or business owners is intrinsically true: pricing exerts the strongest force on profitability. The author makes the point, convincingly so, that it's easier to believe cost-cutting is the way to boosting profits, but his credible background and simple examples demonstrate clearly that one must understand the demand curve of your market (or what your about to invest into or manage) and manage pricing better to achieve the most profitable outcome. Similarly, understanding the elasticity for your goods doesn't take a microeconomist - he demonstrates the simplified method which is just as effective of calculating this and determining optimal price points for profit maximization.
I'm so glad he explores a debate in which he terms "profit square vs. profit triangle." There is a price point that will reach optimum profitability to a single market (calculable). But how do you maximize that when your good or service has a variable diminishing marginal utility, depending on the segment? He explores this and shares the danger of trying perhaps too hard to exploit the maximum profit at any given market for a good or service where multiple segments are served. He demonstrates effective fencing strategies as well as strategies which are commonly used and illustrates how (and why) some just don't work.
Bravo! This is perhaps one of the best books written in my lifetime. It offers more insight than 30 books do on the same subject (revenue management and pricing) and does so in an easy enough to understand way that even the owner of a hot dog stand, a stock investor, or a business manager at a lower level will find easy to understand.
January 22, 2023
A book that covers probably all the aspects of pricing - not just HOW, but also WHY. Talks about how the correct price strategy will not be praised by investors, but a wrong one gets punished by stock dropping fast. About how one should rather aim to higher price when unknown territory because one can set it lower later, but can not elevate later. And mostly the book talks about how important profit is for the company - one should not battle with competition by dropping price, rather the effort should go into pricing and getting the profit from the client; by showing bigger perceived value. And the pricing should also be on the CEO’s table - it is that important. Where to aim the price? Figure out the costs, figure out the maximum a client will pay - and then in the middle of it. When costs rise, rise the price difference /2. When maximum rises, also rise the price /2 of the difference not the 100% amount. Win-win is in the middle.
January 21, 2019
Interesting book for anyone who’s ever asked himself about any of the different pricing strategies/methods and how they impacted growth. I particularly appreciate the high practicality of the book: Real case studies given as examples, hard data that helps readers picture the insights a bit more rationally and above all well thought recommendations from the Pricing Man himself.
I enjoyed reading it and won’t be surprised if I find myself scrolling it’s pages again and again.
STRONGLY recommend!
I enjoyed reading it and won’t be surprised if I find myself scrolling it’s pages again and again.
STRONGLY recommend!
March 6, 2021
Hermann Simon’s Confessions of the Pricing Man, how price affects everything is probably the most important business (or marketing) book you haven’t heard of. Hermann Simon doesn’t think much of a business that doesn’t make money. Like him, if you too are tired of the frenzy about “unicorns” that don’t make any money and want to sink your teeth into old fashioned conversations about profits, Confessions of the Pricing Man is a book you don’t want to miss. My blog has a more detailed review and a book summary.
November 8, 2021
The book is perhaps the authoritative text on pricing from a master on the subject. If, like me, you read it with the expectation of revelations on pricing psychology, then the text might disappoint. On the whole, however, despite feeling a little dated, the abundant research on the topic delivered (like the cover) in no-nonsense black and white and direct text is a very powerful must read on one of the most important topics in business. If you are C-suite, management, inventory management, marketing, sales or buying, you will learn a great deal from this text.
February 28, 2025
While it starts a bit in the vein of other business books, it gets very good as soon as it gets to the core of the premise - prices are neglected, though they are crucial. Many companies push hard to achieve high volume, but sometimes that can actually reduce profits. The book shows many examples which might seem counterintuitive at first and which I could think of too when it comes to where I work. A great book to rethink this aspect of your business, very accessible and easy to understand as well.
January 28, 2018
Some good points on the main subject - pricing. It's not eye opening, but as a beginning entrepreneur you can benefit from disclosing such terms as price elasticity, volume vs. margin and details of efficient sales in luxury, premium and low-cost goods.
The whole book lacks checkpoints or main lessons emphasized. Even knowing that this is a complex subject, I would like to see less case studies and more of the author's views on pricing. Especially second part was really tough to go trough.
The whole book lacks checkpoints or main lessons emphasized. Even knowing that this is a complex subject, I would like to see less case studies and more of the author's views on pricing. Especially second part was really tough to go trough.
May 7, 2022
A book that's better than an MBA degree.
A pricing based approach to:
1. Increase shareholder value
2. Build R&R systems at varied levels to design and implement the pricing strategies
3. Transform gut driven decision making to a scientific method to managing prices in a dynamic market economy (also bursts many economic concepts as we apply them in the real world).
All in all, the book brings pricing as a topic straight to the CEO's desk. Actually, it parks the topic right under her nose.
A pricing based approach to:
1. Increase shareholder value
2. Build R&R systems at varied levels to design and implement the pricing strategies
3. Transform gut driven decision making to a scientific method to managing prices in a dynamic market economy (also bursts many economic concepts as we apply them in the real world).
All in all, the book brings pricing as a topic straight to the CEO's desk. Actually, it parks the topic right under her nose.
October 9, 2022
I'd rate it as 3.5. The book is a bit too theoretical in the sense that most of the concepts depend on debatable hypotheses.
Finding out the price elasticity of your products by asking your team for their opinion does not sound like a relevant way to go.
Most of the price experiments implied changes in other areas of business as well, such as marketing and branding. Which means the tests were quite compromised.
I'd have loved to see more down to earth examples.
Finding out the price elasticity of your products by asking your team for their opinion does not sound like a relevant way to go.
Most of the price experiments implied changes in other areas of business as well, such as marketing and branding. Which means the tests were quite compromised.
I'd have loved to see more down to earth examples.
September 13, 2024
For someone centered on pricing as a job, the book is really great, for someone interested in bettering a business result short term, it has large implications, but for someone interested in improving the business long-term it is counterproductive because it creates a profit trap mentality, and aims for a future that has a moat to defend profits, not one that defends a better business and its backing systems and procedures. The book gives away some dated examples already.
March 22, 2020
It's pathetic a person doesn't know business to talk about business.
Not only the book is mediocre and dispersed, many things are wrong and the way of thinking is misleading.
This book didn't offer any new insights about price, just summarizing common sense and everything we already know, worse, he get many wrong.
Not only the book is mediocre and dispersed, many things are wrong and the way of thinking is misleading.
This book didn't offer any new insights about price, just summarizing common sense and everything we already know, worse, he get many wrong.
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