Many global companies are attempting to survive the postbubble storm by pruning costs and scaling back—even closing—businesses. But you can do only so much cutting before the pain exceeds the gain. Smart companies balance cuts with a range of high-impact marketing approaches.

Pricing is a powerful and often neglected tool that is again attracting attention. But pricing power sounds at first pass like an oxymoron for many companies today. How can they raise prices when the consumer is worried about the economy, big retailers are extracting ever more from suppliers, the Internet has made prices increasingly transparent, and manufacturers in emerging markets are so cost-competitive?

The answer, assert Michael V. Marn, Eric V. Roegner, and Craig C. Zawada in "The power of pricing," is to stop charging higher prices across the board—a nonstarter—and instead get the price right, one customer, one transaction at a time. By returning to the basics of marketing, you capture more of the price you think you already charge.

Our authors call their approach transaction pricing. In this article, they revisit a tool introduced ten years ago—the pocket price waterfall—to exploit it. The technique allows a company to determine how much of the nominal price it actually pockets and how much leaks away, for by knowing accurately where and why revenue is lost in pricing leakages, a company can act to control them. As the authors note, a 1 percent increase in the price the average S&P 1500 company pockets, assuming stable volumes, generates an 8 percent increase in operating profit. The authors have updated the pocket price waterfall to show that transaction pricing remains as relevant as it was ten years ago, and maybe more so in an economic downturn.

Companies can sometimes charge more for their products or services by sharing price information with customers or partners. McKinsey’s 2002 survey of effective channel-management practices in consumer goods companies—the latest in a series that began in 1978—highlights the way top-performing companies use pricing analyses to get retail customers to accept price changes. Click here to read the report on the survey, "Spotlight on the sales force," by Kari G. Alldredge, Tracey R. Griffin, and Lauri Kien Kotcher. It notes that top performers use menu pricing—quoting a variety of prices for, say, different delivery options, to reflect their different costs—far more often than do low performers. The survey also found, surprisingly, that very good trade-spending management may no longer offer a competitive advantage in consumer goods; it may now be just a part of the price to play.

Other companies should look to product development to help engineer a turnaround. In "Detroit’s new quality gap," Niladri Ganguli, T. V. Kumaresh, and Aurobind Satpathy argue that the Big Three automakers trail their Japanese and European rivals in most quality measures, including some, such as styling and a "fun" driving experience, that many customers consider just as important as door handles that don’t fall off. Detroit is thus losing market share—and even the ability to set prices effectively. The authors suggest several practical ways for carmakers to get back into the game.

What do you do when competitors systematically undercut a main source of revenue? That is the predicament of fixed-line European telecom companies. In "A help line for European telcos," Shankar Jagannathan, Stanislav Kura, and Michael J. Wilshire offer some marketing ideas intended to squeeze as much cash as possible from a business that has been badly hurt by the rise of mobile telephony.

Downturns, like boom times, are temporary. But marketing skills honed to pursue profits today will serve companies equally well when growth again supplants cost cutting as an executive priority.