Reviewer's note
Introduction_ 'Confession'

1 A painful first encounter with price
Learning Pricing: The Journey Begins
Teaching Pricing: New Questions, Expanding Horizons
Becoming a Pricing Consultant: From Theory to Reality

2 Everything revolves around price
What does 'price' really mean?
Various pseudonyms applied to 'price'
Pricing: Value is paramount
Value Creation and Value Communication
What Smart Pricing Can Do for You: The 2012 London Olympics
What Smart Pricing Can Do for You: Germany's Rail Card
supply and demand
Scarcity and Cycles
Prices and Government
Pricing power
Pricing expands its own scope.

3 The Mysterious Psychology of Pricing
Price-quality effect
Price as a Quality Indicator
The placebo effect of price
What if prices become obsolete?
Price anchor effect
The Magic of the Middle, or the Lock Story
Neither the lowest price nor the highest price can win.
A filial piety product that no one buys
Create scarcity
Increasing side options increases sales.
Price thresholds and odd prices
prospect theory
Prospect Theory and Prices
Business class or economy class?
Free or Paid: The Big Difference
It's better to pay in cash
The temptation of credit cards
Cash Back and Other Strange Forms
price of the moon
Price structure
Mental Accounting
neural pricing
Conclusion: Beware!

4 Optimal Price Positioning
A successful strategy leveraging low prices
Aldi
IKEA
H&M and Zara
Ryanair
Dell
low-cost alternatives
Amazon and Zalando: Profit vs.
profit
Success Factors of a Low-Price Strategy
Ultra-low prices: Can you go lower than low?
Renault's Dacia Logan and Tata's Nano
Honda Wave
Ultra-low-price positioning of other consumer goods and industrial goods
Ultra-low-priced products for sale in developed countries?
Success factors of ultra-low price policy
Success Strategies for High-Price Policies
Premium pricing
Apple vs.
samsung
Gillette
millet
Porsche
Enercon
Bugs Burger Killer (BBBK)
Premium strategies also have their drawbacks.
Success Factors of a Premium Pricing Strategy
Successful Strategies for Luxury Product Pricing
How much do luxury watches cost?
Swiss watches
LVMH and Richemont
Obstacles in the luxury goods market
Maybach
Is there a limit to the price of luxury goods?
The challenge of creating continuous value
Adhere to limited production quantities
Success Factors of Luxury Product Pricing Strategy
What is the most promising pricing strategy?

5 Profitable price
Are you pursuing the wrong goals?
What effect does a 2% price increase have on profits?
Price is the most effective profit driver.
Back to the Future: General Motors Employee Discount Program
Price, Margin, and Profit
Price is a unique marketing tool.

6. Pricing and Decision-Making
Who, when, where, what, why… and how?
The effect of pricing decisions
Price and quantity
Setting prices based on cost
Follow your competitors
Market-based pricing
Split the value 50:50
How do we find the demand curve and price elasticity?
Expert Judgment: Estimating Price Elasticity Directly
Direct customer surveys on pricing
Indirect customer surveys on price
Price field experiment
Big Data Myths: Using Market Data to Deduce Demand Curves and Price Elasticities
So what about the competitors' prices?
Prisoner's Dilemma: Let's Play
Price leadership
Send a signal
Competitor Reactions and Pricing
What is inflation, and why does it matter when determining prices?
Prices and Inflation: Lessons from Brazil

7 The Essence of Pricing: Price Discrimination
From profit rectangle to profit triangle
How much does a can of Coca-Cola cost?
The difference two prices can make
Why the first beer should be more expensive
Nonlinear pricing in movie theaters
Bundle price
Bundle price consisting of optional items
Unbundle pricing
Multiple customer pricing
The more you buy, the cheaper it gets? Beware!
Price discrimination and price differentials
Price and location
Price and time
Products that are damaged
Patent for dynamic pricing
Equipment utilization rate and price
Price and scarcity
High-Low Strategy vs. EDLP Strategy
Advance booking discount and reservation discount
Market Penetration Strategy: Toyota Lexus
Skimming Strategy: Apple's iPhone
Information and profit cliff
Fence
Pay attention to the cost

8 Innovative Pricing Methods
A groundbreaking improvement in price transparency
Pay as you go
New price unit
Introduction of a new pricing variable: Sanifair
Amazon Prime
industrial gases
ARM
premium
Flat rate
Prepaid plan
Customer-Driven Pricing
Pay the desired amount
profit-oriented incentive system
Price prediction
Intelligent additional pricing plan
A pricing system that allows you to select and purchase only the items you want.
Harvard Business Review Publishing
auction

9 Pricing and Price Wars in an Economic Crisis
What is an economic crisis?
Declining sales or lower prices?
Smart Ways to Lower Prices
Instead of lowering the price, offer cash or goods!
Stay off the consumer's radar
Worst Nightmare: Overcapacity
Price increases during recessions
price war

10 Things a CEO Should Do
Price and shareholder value
Increasing market capitalization through price
An additional $120 million through pricing decisions
Price and market capitalization
The day the Marlboro Man fell off his horse
20% off all items: Practicer Case
The Fatal Impact of a Price War: The Potassium Carbonate Oligopoly
In his own words: Netflix
J.C. Penney's strategy to convert consumers to luxury goods has failed.
Discounts and Promotions: Abercrombie & Fitch
Increasing Market Share by Adhering to Pricing Guidelines: The Case of a Telecom Company
Pricing and Financial Analysts
Prices and private equity investors
Key Roles of Top Management

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Bigger profits, stronger competitiveness!
At the center of everything is ‘price’!

Hermann Simon, a global pricing authority and author of "Hidden Champions"
Talking about the best pricing strategy that maximizes 'customer value' and 'corporate profit'!

★ Fortune's "Best Business Books to Read in 2017"
★ "The Bible of Pricing! No Controversy!" _Amazon.com
★ Selected as a must-read for pricing and marketing strategies for major domestic companies!

Hermann Simon, widely known to domestic readers as the author of the best-selling book Hidden Champions, has published a new book, Pricing by Hermann Simon.
As the title suggests, this book covers everything about ‘pricing.’
This book was ranked at the top of the list of the top 5 must-read business books of 2017 selected by the American business magazine Fortune, and its word of mouth was already so widespread that some large domestic companies, recognizing the importance of its contents early on, selected it as a textbook for teaching pricing and marketing strategies.
This Korean edition was reviewed by Professor Pil-Hwa Yoo of Sungkyunkwan University's Graduate School of Business, an authority in the field of domestic pricing, thereby enhancing the rigor and reliability of the terminology and overall content.
Hermann Simon, the world-renowned management scholar born in Germany, the Peter Drucker of Europe, and the chairman of Simon-Kucher & Partners, a firm that boasts the world's best consulting on pricing, guides us through this book with a treasure trove of wisdom on 'pricing' that he has accumulated over the past 40 years (from just after World War II, when he first became curious about 'price' as a child, to the present).

“I confess that this book comprehensively captures my pricing struggles, adventures, triumphs and failures.
“I am still amazed every day by the atypical and creative new pricing ideas that pop up.” As seen in the author’s ‘confession,’ this book presents the author’s autobiographical stories of his first encounter with pricing while working on a livestock farm as a child, his dramatic encounters with masters such as Philip Kotler and Peter Drucker, the rich and diverse cases he has encountered over the past 40 years, and new, surprising, innovative pricing methods.
These cases are even more valuable because they are based on vivid, up-to-date data produced by Simon-Kuher & Partners.
Amazon.com has described Hermann Simon's Pricing as "the bible of pricing."

The Essence of Corporate Management: Pricing and Price Management
A book that perfectly showcases its influence and innovative methods!

This book is the key to the treasure trove of wisdom on 'pricing' that author Hermann Simon has amassed over 40 years.
“Everything you need to know about pricing is in this book.
This story is deeply relevant not only to consumers, but also to managers, executives, sales professionals, and marketing experts.
As your trusted guide, I'll walk you through pricing techniques and strategies, the best and worst pricing practices.
“I hope you enjoy exploring the vast world of price, and that you will encounter a moment that makes you slap your knee at least once along the way.” (From the introduction, “Confession”)
The vast world of pricing remains shrouded in uncertainty and mystery, despite numerous studies, case studies, and countless successes and failures.
As with any field of science, the deeper you delve into the world of "price" and "pricing," the more you learn and the more questions you become.
Price as a point of balance between supply and demand, price as the best marketing weapon to increase sales in a highly competitive market, price as a medium to convey the value of a product, and even price, which is the thing that CEOs should devote the most time and energy to, but which they end up deciding 'carelessly' (or sometimes 'moderately')...
The author unravels all of this in an orderly manner with excellent writing skills and detailed explanations.
A brief overview of the contents of this book, which consists of 10 chapters, is as follows.

Chapter 1 is a fascinating autobiographical account of Hermann Simon's rise to become the world's greatest pricing expert (The Pricing Man).
Even readers unfamiliar with Hermann Simon will quickly feel a sense of familiarity and be immersed in the narrative of pricing that follows.

Chapters 2-4 examine all the elements of our economy that revolve around price, the central role of the mysterious psychology of price, new and surprising discoveries, and how different price positioning can lead to sustained "profits."
This book presents cases of corporate damage caused by price uncertainty, various dimensions of price such as price and value, standard price, discount, bonus, special price, bundled price, wholesale price, retail price, producer's recommended price, special services, and additional services, examples of smart pricing decisions, and the psychological drivers of pricing used as a marketing technique. These are presented in an easy-to-read and engaging manner, with a variety of case studies.

The author emphasizes that among the many aspects of pricing, the most important is 'value'.
To be more specific, it can be said to be ‘value perceived by customers.’
The Latin word 'pretium' has two meanings: 'price' and 'value'.
Literally speaking, price and value are one and the same.
'Value' is mentioned frequently in various ways throughout this book as the basis for understanding the nature of pricing.
Chapters 5 and 6 examine more internal pricing dynamics based on the bird's-eye view covered in Chapters 2 to 4.
In particular, in Chapter 5, the author emphasizes that “profit pursuit is both an incentive for and a consequence of good pricing decisions, and the two cannot be considered separately.”
“Profit is ultimately the only valid criterion that will guide your business.
The reason is simple.
Because profit is the only criterion that allows a company to consider both the revenue and cost aspects simultaneously.
Companies that want to maximize sales tend to ignore the cost aspect.
Companies seeking to maximize market share can distort their operations in numerous ways.
After all, the easiest way to maximize market share is to bring the price down to zero.” Based on this explanation, Chapters 5 and 6 explain the basic economics related to price.
In other words, it presents specific and practical methods for “how to determine prices in a way that will make your company profitable.”
Chapter 7 is 'The Essence of Pricing: Price Discrimination'.
We suggest various pricing strategies to get closer to maximum profit by setting prices at various levels.
We have compiled and organized various strategies that many companies have tried so far, including nonlinear pricing, bundling and unbundling, price discrimination and price differentials, price and time, high-low strategy, EDLP (Every Day Low Price) strategy, and skimming strategy.
Based on this, you will be able to develop and implement a strategy that is suitable for your company.
Chapter 8 examines some of the innovations that have occurred in the field of pricing.
Some of the presented examples are already established concepts, while others are still only potential.
Depending on the type of product and service, and customer preferences and needs, you can encounter innovative pricing strategies that change and emerge constantly.
Chapter 9 introduces pricing strategies that can be utilized in economic crisis situations.
In a situation where the consumer market is shrinking and costs are rising, what is the wisest pricing strategy? Should we cut prices outright? What are the alternatives? What strategies are necessary to ensure profitability when raising prices during a recession? This book will provide answers to the concerns of many domestic mid-sized and small businesses.
Chapter 10 reiterates the profound impact that price has on profits, arguing that this is why CEOs should pay even greater attention to pricing issues.
We offer valuable advice to help you become a market leader, including guidance on long-term profit orientation and tips for short-term success.
The author says he always tells this to countless entrepreneurs.

“Good pricing decisions require three prerequisites:
It's about creating value, quantifying value, and communicating value.
If you do that, you will be able to get the price you deserve, the price that will bring profit to the business.
One more thing, above all else, keep in mind that you must avoid price wars.”

The work of making people spend money will continue without end.
The process of determining prices will also be repeated continuously.

Prices have a history as old as humanity.
Prices existed before money was invented.
Also, everyone produces and consumes value.
There is a constant cycle of spending money and thinking it is worth it, or convincing others that it is worth it.
But many companies still seem to think of value, profit, and price as separate things.
Even companies are unable to properly assign value or price to the act of 'pricing'.
There is a proverb in Russia:
“There are two kinds of fools in every market.
“One is a fool who bids too high, and the other is a fool who bids too low.” Can you say that you don’t fall into either of these two categories?
Hermann Simon's Pricing is a classic, full of insights and guidance that every manager must read, learn, and put into practice.
It is also a must-read for professionals in each field involved in processes such as product conception and planning, post-launch marketing and sales.
Moreover, as the author mentions several times in the book, this book provides very useful criteria for consumers who are constantly evaluating the value of products or services they need and searching for the right price.
In the mid-1970s, Peter Drucker was "impressed" by Hermann Simon's emphasis on pricing, saying it was "the most neglected area of ​​marketing."
Drucker realized that profit was the cost of survival and that price would determine a company's survival.
If we recall Drucker's remarks, based on the premise of fair market practices and price transparency, we will be able to understand the ultimate message of this book, "Hermann Simon's Pricing," namely, why "greater profits" and "stronger competitiveness" begin with pricing.

“Companies that ‘eat’ society are not companies that earn profits commensurate with their true cost of capital, the risks of tomorrow, and the needs of tomorrow’s workers and pensioners.
“Companies that fail at these things are the ones that are eating away at society.”