November 2011
Intermediate to advanced
256 pages
6h 35m
English
book
Contextual Pricing: The Death of List Price and the New Market Reality
by Robert Docters, Michael Barzelay, John G. Hanson, Cecilia Nguyen
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Chapter 6
Price Structure
My new book is coming out soon. It’ll be the usual rubbish, but it won’t cost much. That is the bargain we are going to strike with you.
—JOHN LENNON, BEATLES CHRISTMAS MESSAGE, 1965
Price structures, sometimes called price models, are what translate events into a dollar amount. Structure can also be defined as the terms under which you sell your service or good. A simple “flat” price structure is a transfer of ownership with a specific price tag. Other price structures are more complicated, and can be considered the “formula” by which the transaction will command cash flows. More complex sales may have components of a flat sale price, plus components which are variable with usage (by the unit, by the input, by the event, ...
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