Correspondence: Michael Calogridis, Pricing Strategy, Philips Medical Systems, 22100 Bothell-Everett Highway, Bothell, WA 98021, USA. Tel: +1 425 487 7689; C 206-300-5135; E-mail: michael.calogridis@philips.com

¹Michael Calogridis has over 15 years total experience in roles supporting development of pricing and pricing strategies. In that time, he has worked for FedEx, AT&T Wireless, Quest Diagnostics and now Philips Medical Systems. He is well acquainted with efforts to build the pricing role in companies where that role has really never existed. There are certain basic 'rules' that he has used time and again when constructing a price function.

Received 11 October 2005; Revised 11 October 2005.

Abstract

This paper is written from a very practical aspect in attempting to define the 'basics' required to even think about building/refining the pricing function in any type of company. One of the tendencies that I've noticed in pricing articles is a decided slant toward the more abstract with little in the way of 'practical' input in what exactly you need to do, who needs to do it and what exactly will be the benefit in terms of increased dollars and/or increases in profit margin. The attached article focuses on the base requirements to build a pricing function, literally in any industry. The writing style used is very direct without an overflow of stylistic terminology so as not to turn the paper into a textbook.