Disclosure - I worked with Tom Nagle, John Hogan and Joe Zale at Monitor Group and continue to work with them at LeveragePoint, where we are coding many of their ideas into software tools, so my review may be a bit biased.
This is a major update of the classic book on strategic pricing, a book that introduced many of us to the field and that taught us how to think about customer value and how it relates to price. In my case, this book also helped me to sharpen my understanding of pricing, segmentation and bundling and changed how I thought about sunk costs and pricing. If I had read this book ten years ago I would be a wealthier person today.
What's New in the Fifth Edition?
A completely new chapter on "Pricing Strategy Implementation" identifies the challenges involved in embedding strategic pricing principles within an organization and describes how managers can lead a structured change process to build a commercial organization more consistently focused on value creation, for the firm and its customers
The revised chapter on "Pricing Policy" provides a theoretically grounded framework to describe specific policies for managing price changes for a variety of situations including raw material cost increases, demand recessions, and new product launches.
The chapter on "Value Creation" for the first time addresses explicitly how to deal with value differently when it is driven by subjective psychological drivers (such as doing the right thing for the environment) rather than by tangible monetary drivers (for example, saves money on fuel).
The chapter on "Value and Price Communication" has been substantially revised to describe how to communicate value in a wide variety of product and customer contexts. It demonstrates how to target communications to affect specific behaviors throughout the customer's buying process.
The chapter on "Price Setting" has been expanded to provide a robust process for setting prices that can be widely applied both to consumer and business markets.
Throughout the book, we have updated examples with more topical illustrations of current pricing challenges (such as iPhone pricing, new models for pricing music, and services pricing).