Based on a article on 8 sins of pricing. See a longer version of this at http://iterativepath.wordpress.com/2009/05/19/3-components-of-effective-price-management/

1. Effective Price Management
Rags Srinivasan
IterativePath.com

2. 8 Pricing Problems and Solutions
Problem Solution
Cost Based Pricing Value Based Pricing
Price Leakage Price Realization
Price erosion from low-margin sales Maintain Reference Price
Incorrect cost allocation Focus on relevant costs
Treating all customers the same Segmentation and Versioning
Aggregating costs Tracking Cost to Serve each customer
Not knowing effect of pricing Understanding Price Elasticity
Product Margin Customer Margin
Problems Adapted from “8 Deadly Sins”, James Mason, ICIS.com

3. 3 Components of Effective Price Management
• Segmentation and Versioning
Value-add to • Value based pricing
Segments • Price realization
• Reference price
• Price elasticity
Incremental • Relevant costs
Analyses
Customer • Cost to serve customers
Margin • Total revenue per customer

4. See a longer version of this at
IterativePath Blog