iit bombay case workshop - session 2

8/11/2019 IIT Bombay Case Workshop - Session 2

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Case Workshop SSession 2 - P

Aviral Bhatnagar (MKetav Mehta (McKins


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Session Overview

1. Profitability case solved in an interview setting by the speakers (Wethis last time due to lack of time)

2. Introduction to Pricing cases

3. Framework to solve pricing cases4. Pricing case solved in an interview setting by the speakers5. Audience case solving session6. Live project to consult a startup and solve its problem


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Profitability Mock Case

Our client is a pharma company. It is a market leaderexperiencing declining growth since the past few qua

have hired you to investigate this problem and give srecommendations.


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Pricing - Introduction

Topics covered within this framework:

Cost based pricing

Value based pricing

Competition based pricing


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Pricing Case

Your client is a local ice-cream manufacturer and wishes to bid for th

selling ice-cream at Mohali Cricket Stadium. He wishes to know if heparticipate in the bid and if yes, what should be his bid price?


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Pricing Introduction and Framew

Background Questions:

Understanding the company, the market and the product Company:

What is my companys main objective and its quantification: To make profits, to enter the market sashare or maintain a brand value/premium product? Payback period, RoI, etc.

Brand value of the company in the specific market

Market

What is the type of market : Monopolistic, Oligopolistic or highly competitive

Primary purchase driver (brand, quality, price, etc.)

Growth rate and stage of market (growth, maturity, decline)

Product:

What is the type of product : High Price High Value, Low Price High Value, Low Price Low Value?

Patent/USP/Differentiator

Switching costs

Using these three we can understand what is our optimal pricing strategy


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Pricing Introduction and Framew

Pricing

Competition Demand Finances


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Competition

Competitors

Background

Size

Growth

Profitability

Brand Value

Products

Pricing

Portfolio

Mix

USP/Differentiator

Switching Costs

Substitutes

Products

Pricing

Suitability


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Demand

NeedFulfilment

Type of

need

Timeline

Willingnessto Pay

Purchasing

Power

BrandValue

ValueCreation

Produc

Service


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Finances

Market

Sizing

Salesestimates

Revenue

estimates

Costs

FixedCosts

Variable

Costs

Profits

Historical

Future

Company

BalanceSheet

Outlook

Value Chain

Raw Materials Manufacturing Transport Inventory Distributio

Break costseasily viaValue Chain


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Pricing

Competition

Competitors

Background

Size

Growth

Profitability

Brand Value

Products

Pricing

Portfolio

Mix

Substitutes

Products

Pricing

Suitability

Demand

NeedFulfilment

Type of need

Timeline

Willingnessto Pay

PurchasingPower

Brand Value

ValueCreation

Product

Service

Fina

Costs

Fixed Costs

VariableCosts

Pr

H


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Process Overview

BackgroundInformation

Product

Company -objectives

Competitive

Landscape

Market

Customers

Market Sizing

ProfitEstimation

Revenues

Costs


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Pricing strategies

Competitive Based Pricing : Objective to gain market share; higcompetitive market, Low Price markets

Value Based Pricing: Objective to maintain brand image/ roll ouproduct, not a very competitive market, High Price High Value m

Cost Based Pricing: Objective to safely cover costs and enter mnascent markets, new product new market roll outs


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Pricing Audience Case

Our client is General Electric and has invented a ne

bulb. This revolutionary bulb runs for 500 years. Estmarket size and what should be the price of the bul

iit bombay case workshop - session 2

Documents