Six Sigma Pricing (paperback): Improving Pricing Operations to Increase Profits

Paperback | September 17, 2007

byManMohan S. Sodhi, Navdeep S. Sodhi

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Apply Six Sigma to Your #1 Business Challenge: Pricing

 

“Six Sigma is well known for having helped companies save billions of dollars. This book is the first to show us how to use it on the revenue side of the equation to generate profitable growth. This step-by-step guide will be an instant classic–a seminal book on a topic critical to profitability.”

–Robert Cross, Chairman and CEO, Revenue Analytics Inc. and author of Revenue Management

 

“Six Sigma Pricing provides companies with a practical toolkit to improve their price management. The authors show executives how to use Six Sigma tools in their pricing processes and instantly improve profits and their bottom-line. This is a truly ‘must-have’ resource for managers everywhere.”

–Eric Mitchell, President, Professional Pricing Society

 

Many companies have developed solid sales strategies— but without equally good pricing operations, those strategies alone will not add a dime to the bottom line.

 

The goal of pricing operations is to consistently control price deviations in transactions and contracts over time and across customer segments. This goal of ensuring the prices are not too low or too high in different transactions relative to guidelines lends itself perfectly to Six Sigma. Using the authors’ breakthrough Six Sigma-based approach, you can systematically eliminate pricing-related revenue leaks, driving higher profits without alienating customers. You’ll learn how to define pricing “defects,” gather and analyze relevant pricing data, review pricing-agreement processes, identify and control failures, implement improvements, and then ensure continuous, ongoing improvement in price, profits and customer satisfaction.

 

The book reflects the authors’ pioneering experience implementing Six Sigma pricing. Whether you’re a business leader, strategist, manager, consultant, or Six Sigma specialist, it will help you or your client recover profits that have been slipping through the cracks in pricing operations.

 

Learn why Six Sigma Pricing makes sense

    Why you should target pricing operations, and how to do it 

 

Identify profit leaks from inefficient pricing operations

    Why “sloppy pricing” occurs, how to find it, and how to root it out 

 

Illuminate your current pricing processes, so you can improve them

    Understand your market-facing and internally focused pricing processes pertaining to product launch and lifecycle price management, price increases due to escalation in costs of raw materials, promotions, and discounting

 

Set up your pricing operations for continuous improvement in line with your pricing and sales strategy 

    Use Six Sigma to improve and control processes, ensuring alignment with agreed-upon strategy for pricing and sales

 

Create an organization that is successful at pricing

    Align different functions and levels of the company to achieve targeted profits

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From the Publisher

Apply Six Sigma to Your #1 Business Challenge: Pricing   “Six Sigma is well known for having helped companies save billions of dollars. This book is the first to show us how to use it on the revenue side of the equation to generate profitable growth. This step-by-step guide will be an instant classic–a seminal book on a topic cri...

From the Jacket

Apply Six Sigma to Your #1 Business Challenge: Pricing   “Six Sigma is well known for having helped companies save billions of dollars. This book is the first to show us how to use it on the revenue side of the equation to generate profitable growth. This step-by-step guide will be an instant classic–a seminal book on a topic cri...

Navdeep S. Sodhi is managing director of Six Sigma Pricing, a consulting firm based in Minneapolis and London. He has more than twelve years of global pricing experience spanning several industries: airlines, medical device, and B2B manufacturing. He has an MBA from Georgetown University. He has applied Six Sigma and Lean methods to p...

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Format:PaperbackDimensions:288 pages, 8.9 × 5.9 × 0.7 inPublished:September 17, 2007Publisher:Pearson EducationLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0132736772

ISBN - 13:9780132736770

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Extra Content

Table of Contents

Preface

 

PART I Motivation and Context

 

1 Why Pricing Operations and Six Sigma Pricing

    1.1 Introduction

    1.2 Who Should Read This Book and How They Should Read It

    1.3 Why Target Pricing Operations

    1.4 Pricing Challenges and Six Sigma Pricing

    1.5 What Six Sigma Pricing Is

    1.6 What Six Sigma Pricing Is Not

    1.7 Summary

 

2 Profit Leaks from Inefficient Pricing Operations

    2.1 Introduction

    2.2 Examples of Price Leaks

    2.3 Why Price Leaks Occur

    2.4 The Role of the Pricing Function

    2.5 Summary

 

3 Case Study—Pricing Operations and Six Sigma Pricing

    3.1 Introduction

    3.2 Background

    3.3 Six Sigma

    3.4 Define

    3.5 Measure

    3.6 Analysis

    3.7 Improvement

    3.8 Control

    3.9 Results

    3.10 Summary

 

PART II Basics—Pricing Operations and Six Sigma

 

4 Price and Pricing

    4.1 Introduction

    4.2 Different Types of Prices

    4.3 Different Levels of Pricing

    4.4 Summary

 

5 Pricing Operations

    5.1 Introduction

    5.2 Processes and Roles

    5.3 List Price Increase

    5.4 New Product Launch Pricing and Lifecycle Maintenance

    5.5 List Price Increase Due to Increase in Input Costs

    5.6 Promotions

    5.7 Discount-setting and Concession Process

    5.8 Analysis, Report, and Review Processes

    5.9 Summary

 

6 Six Sigma

    6.1 Introduction

    6.2 Historical Background

    6.3 Why Six Sigma and Not Five or Seven

    6.4 Misperceptions of Six Sigma

    6.5 Application of Six Sigma to Non-manufacturing Situations

    6.6 Five Steps of a Six Sigma Project (DMAIC)

    6.7 Summary

 

7 Tools for Six Sigma

    7.1 Introduction

    7.2 Tools for the Define Phase

    7.3 Tools for the Measure Phase

    7.4 Tools for the Analyze Phase

    7.5 Tools for the Improve Phase

    7.6 Tools for the Control Phase

    7.7 Summary

 

Part III Doing a Six Sigma Pricing Project

 

8 Selecting a Six Sigma Pricing Project

    8.1 Introduction

    8.2 Acme

    8.3 Summary

 

9 Define Phase

    9.1 Introduction

    9.2 The Charter

    9.3 Customers and Their Requirements

    9.4 High-level Process Map

    9.5 Define Checklist

    9.6 Acme

    9.7 Summary

 

10 Measure Phase

    10.1 Introduction

    10.2 Process Map

    10.3 Data Collection Plan

    10.4 Acme

    10.5 Summary

 

11 Analyze Phase

    11.1 Introduction

    11.2 Process Analysis

    11.3 Root-Cause Analysis

    11.4 Data Analysis

    11.5 Acme

    11.6 Summary

 

12 Improve and Control Phases

    12.1 Introduction

    12.2 Improve

    12.3 Control

    12.4 Final Presentation

    12.5 Acme

    12.6 Summary

 

PART IV Enterprisewide Deployment.

 

13 Deploying Six Sigma Pricing Enterprisewide

    13.1 Introduction

    13.2 Developing an Enterprisewide Plan for Six Sigma Pricing

    13.3 Goals for Enterprisewide Deployment

    13.4 A Starting Toolset for Six Sigma

    13.5 Pitfalls and Challenges

    13.3 Summary

 

14 The Takeaway

 

Notes

 

Index