The indefatigable Starbucks (NASDAQ: SBUX) has made another strategic business decision ... it has decided to raise the price for some beverages and reduce the cost for others.

What is the line of demarcation? Complexity. Drinks that take more of a barista's time to make (such as Frappuccinos) will now be priced 10 to 30 cents higher, while simple drip coffee and lattes will be priced 5 to 15 cents lower.

According to a piece in the Wall Street Journal, Starbucks (NASDAQ: SBUX) is thinking outside-of-the-cup. The company is experimenting with new pricing strategies in Seattle, such as selling short drip coffee for $1.00 a cup (8 ounces). What's more, there are even free refills.

With increasing competition – such as from Dunkin' Donuts and McDonald's (NYSE: MCD) – and the slowing economy (as well as higher supplier costs), it seems that Starbucks has no choice.

To get some perspective on things, I interviewed Rafi Mohammed, a pricing expert and author of The Art of Pricing. He recently wrote a piece on how McDonald's represents a real threat to the Starbucks' franchise. Simply put, there are many consumers who prefer steep discounts on coffee – even if the quality is not pristine.

Apple Inc. (NASDAQ: AAPL) has agreed to lower its iTunes prices in Great Britain to align them with its prices in the rest of Europe, settling an antitrust case brought by EU regulators.

According to The New York Times, "The European Commission accused Apple last spring of unfairly charging British consumers more than their counterparts in the euro zone for tracks from iTunes, the dominant online music vendor. British consumers typically pay 79 pence, or $1.55, a song while iTunes stores in the euro zone charge 99 euro cents, or $1.46."

Thank goodness the European Commission is there to put a stop to consumer gouging like that! On a slightly more serious note, I consider myself as pro-consumer as it gets -- but do people really need the government stepping in to tell companies to lower their prices on song downloads by 9 cents? Plus, exchange rate fluctuations could make this ever more complicated. Downloading music in Europe could turn into the new FOREX.

In any case, government intervention on something as trivial as this is almost as silly as congressional hearings about Roger Clemens' use -- or lack of use -- of steroids.

Don't our elected and appointed officials have anything better to do? Perhaps issues like this keep them from messing up anything more important.

Six Sigma Pricing: Improving Pricing Operations to Increase Profits by M. and N. Sodhi should be required reading for everybody in business, whether in finance, sales, or marketing. This is the most accessible, non-jargon-filled explanation of Six Sigma processes I have read. Using case studies, the authors prove that, just as Six Sigma procedures can be used to define, analyze and reduce defects or deviations in manufacturing processes, these same procedures can be applied to the complicated realm of pricing to examine and then reduce "defects" or fluctuations in pricing. Using Six Sigma methodologies company-wide will help everyone involved in setting and abiding by published prices understand that repeated, unnecessary, unauthorized differences between list prices, discount prices, invoice prices, and realized prices have a direct and usually negative impact on a company's bottom line.

Pricing consistency and control is internal to a company to a large extent. Deviations from list prices do happen primarily because different people in different departments have different goals: greatest profit for people in finance, market share for those in marketing, volumes of sales (and sales bonuses) for salespeople. The authors argue that companies need to build cross-functional pricing teams so that representatives of all groups involved with pricing can have input into how and why pricing is set the way it is for maximum company profitability.

Even readers unfamiliar with basic statistics can benefit from this book. Chapter 7 includes a basic nontechnical overview of the statistical tools involved in Six Sigma analysis. The point of this book is not to teach HOW to implement Six Sigma procedures in pricing processes, though Chapter 6 provides enough basic information to get a team started. Rather, the authors prove WHY companies should implement Six Sigma methodologies to stem "profit leaks." Numerous graphs, tables, and flow charts provide visual reinforcement of the information in the text. Each chapter contains a brief summary. Chapter 13 provides a useful checklist of steps to take, and in what order, to deploy Six Sigma thinking across nonmanufacturing processes in order to better control the outcome.

After the sizable price cut on the iPhone, the shares of Apple Inc. (Nasdaq: AAPL) have been jumpy. Kind of like Google Inc. (Nasdaq: GOOG), it's never easy to predict the goings-on at Apple.

So is the price cut a good thing?

Well, I had a chance to interview Rafi Mohammed, who is a pricing expert and the author of The Art of Pricing.

His opinion on the matter?

"With Apple announcing it recently sold one million iPhones, what should be clear is that last week's $200 price cut was not out of desperation. It was a very strategic move. When it released the iPhone, Apple stated its two key goals: sell one million phones before September 30 and 10 million phones before the end of 2008. One million iPhones were sold in just 74 days, but to achieve mass adoption, Apple has to cut its price to attract everyday customers. This is exactly what Apple is doing. Additionally, following its classic strategy of under promise and over deliver, an early September price cut will produce blockbuster numbers for its first full quarter (which ends on September 30) of iPhone sales.

Apple's next step is to do exactly what it has done with its other innovative products like iMacs and iPods: offer a full line of good, better, and best iPhone products. A good, better, and best line will enable Apple to achieve mass adoption while also profiting from those willing to pay for a premium product.

"Apple's rollout strategy illustrates the key roll that price plays in profits and growth. Apple employed a classic pricing strategy of lowering prices over time. And as I mentioned previously, there may have been room to even price the $599 version (Apple has noted that most iPhone sales were for the higher priced model). While many companies lower prices over time, they fail to offer a good, better, and best product line that enables them to price for profits and growth.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

Companies spend lots of time trying to cut costs. Unfortunately, they often don't pay as much attention to pricing. As a result, there may be needless discounting and promotions, as well as pricing that is below breakeven levels.

In fact, a recent study from Gartner shows that a 1% improvement in price can translate into an 11% increase in profitability. This compares to a 3% increase in profitability when there is a 1% improvement in fixed costs.

So what can your business do to get better pricing?

Well, I had a chance to talk to Rafi Mohammed, who is a pricing expert and the author of The Art of Pricing: How to Find the Hidden Profits to Grow Your Business (he also operates a consulting firm, Culture of Profit).

He says a highly effective strategy is "versioning." That is, you can have a basic version and an advanced version of a product. Of course, there will be a differential in pricing. Then again, customers will understand that they will get better value for the advanced version.

You can get creative with this. Take Allegiant Air (NASDAQ: ALGT). The company attracts customers with rock-bottom airfares (the basic offering). But then there are add-ons such as vacation packages, seat assignments, beverage sales, and so on. As a result, Allegiant gets more than $15 per passenger in such ancillary revenues.

This week, the online travel tracker – Yapta – announced it raised about $2.3 million in venture capital from First Round Capital.

The company's service is definitely intriguing. Basically, it alerts you if an airfare has decreased – and allows you to get a refund. This is the case so long as you purchase tickets directly from airlines, such as United (Nasdaq: UAUA).

I had a chance to interview Rafi Mohammed, an expert on pricing. He runs a consulting firm, Culture of Profit, and is the author of the book The Art of Pricing.

According to him:

"I really love this concept and tell all my friends about it. Yapta watched a trip to LA for me – started at $530 and I bought at $390. I'm going to buy my holiday tickets and have Yapta watch for lower fares.

"I believe Yapta offers a great service that travelers will embrace. With the airline industry changing millions of prices every hour, consumers are often caught in the Catch 22 conundrum of buying now or hoping for lower fares later. Yapta reduces the uncertainty of these often wide airline ticket price swings and helps its users benefit from the lowest prices. Yapta offers a service that every airline customer can financially benefit from."

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

In the world of individual investors, "Blackstone IPO" is a phrase that ranks right up there with "Amanda Beard photos" in overall sexiness and mystery. Will it be everything that we hope? we wonder, and the fact is, it probably won't. The IPO is due to price today after the market closes, and will start trading tomorrow under the symbol "BX" on the NYSE.

The thing that is problematic, as Peter Cohan has pointed out, is that the term "monetization" weighs heavier (and, for us, far, far less sexy) on the company's prospects than anything. The fact is: the firm isn't forecasted to make a profit for years so it can pay off its partners, for instance, chief despot and CEO Steve Schwarzman. Not just that, but individual investors will be subject to a variety of strange tax impacts, including the rather less-than-detailed reporting the company plans to issue and the possibility that legislation might create adverse tax consequences for the little guy.

It's funny, too, that Schwarzman called the public markets overrated, and mentioned that rival Kohlberg Kravis Roberts had "destroyed the market" for anyone else. I guess, in a few moments, we'll see. The IPO priced at $31 per share, the top end of the range expected and setting Blackstone's valuation at $33.6 billion.

I have a feeling that not many PR firms will release news on June 29. No doubt, the focus will be on Apple (NASDAQ: AAPL)'s eagerly awaited iPhone.

Of course, the buzz is already intense.

But what about the price? Is Apple asking too much?

I had a chance to interview Rafi Mohammed, an expert on pricing. He runs a consulting firm, Culture of Profit, and is the author of the book The Art of Pricing.

What's your take on the pricing strategy?

Apple did a great job of setting prices.

If you had the good fortune to invest with Warren Buffett in 1965, your return would be about 305,134%. That compares to about 5,583% for the S&P.

However, Buffett may be missing out on some easy money. This is according to Rafi Mohammed, who is the author of The Art of Pricing: How to Find the Hidden Profits to Grow Your Business and runs Pricingforprofit.com.

True, he thinks Buffett made a good deal when he purchased NetJets in 1998. The model – of fractional ownership – allows more people to use the service.

But, what happens during peak times, such as during on the Super Bowl or certain holidays? NetJets fills the increased demand by chartering jets – which is awfully expensive.

In other words, the company could increase profitability by adopting a simple strategy of peak/off-peak pricing. For example, if you have a non-peak option, there are black-out periods. A peak owner, however, will get to fly at all times.

According to Rafi: "A pretty straightforward and profitable fix to an expensive challenge, wouldn't you agree? The upside of better pricing is not limited to NetJets. I believe that every business can uncover their hidden profits through simple pricing changes."

Yes, even Warren Buffett can learn some lessons.

You can get a full analysis at Rafi's blog.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.

Microsoft Corporation (NASDAQ:MSFT) today unveiled its Zune digital media player, with no details as to launch date or pricing (my guess: one pack will be $149, another will be $249, and still another will bump up against $400). Immediately my reaction was: brown?!?

Yep, not only is Microsoft filling the "white" and "black" market segments, just like iPod and about every other digital music player manufacturer out there, but the company has decided to enter the little-trafficked "brown" category. I never thought I'd say this (I never even knew it might be something I could say), but: I want a brown Zune! It's almost genius in its geekiness.

Microsoft announced that the Zune would be pre-loaded with music from labels like EMI Music's Astralwerks Records and Virgin Records, Quango Music Group, and V2/Artemis Records, and laid out a detailed description of the "Packs" which would be available (Car, Home A/V, and Travel). Microsoft will surely be rushing to get the player in stores by November for holiday shopping.

And make sure you pack Portland stores with lots of brown, Mr. Ballmer! [Update: Engadget has all the technogeek specs for those of you who like that sort of thing.]