Good Book

I randomly picked this up at the library and found it a really good read. The Art of Pricing gives you some insight to how you should think about price-setting, with the point being the need for price differentiation. As a seller, you have to think beyond the one "magic" price and try to capture the value of your product more effectively through a pricing policy that varies according to the type of buyer.

For those of us who are not CEOs, the book provides some theoretical basis for the discounts and package deals that we so often see in the papers. An example would be how restaurants typically price their main courses at a lower margin to entice customers to eat there. Once the customer chooses to eat there, the restaurant then makes most of its money off the over-priced drinks and desserts. Just think about N.Y.D.C (a cafe in Singapore): the budget main courses cost the same if not less than the desserts!