product pricing # ipma session apr 27

8/16/2019 Product Pricing # IPMA Session Apr 27

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PRODUCT PRICINGPRICING IT RIGHT


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AGENDA

Product Pricing – Why?

Pricing & Product Vau!

Pricing & Pac! "#argin$% #D% Inc!nti'!$% (anding Pric!)

Pricing & Po$itioning "Pric! (!ad!r$hi*% Pr!+iu+ Pricing) Pricing & Piracy

Pricing & Vou+! Purcha$!

Pricing #irror$ ,u$in!$$ #od!


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WH- PRODUCT & PRICING?PRODUCT & PRICING GO HAND IN HAND.


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PRICING ,A/IC/

Anyone

Compete O

(Myth

• If your value tomerely a low p

either keep an

new job (or) en

other paramete

to deliver price


5/36

WH- PRODUCT PRICING?

WH- PRODUCT?

R!ady to 0/ati$1y2 "or) to 0Cr!at!2 a N!!d

Cor! Product Actua Product Aug+!nt!d Product

Eith!r ha$ a 0Utiity2 "or) 3ind!$ a 0D!$ir!2

0ini$h!d2 to ,uy "or) to R!$!

/oution$ 0Pac3ag!d2

Can 4! 0Tangi4!2 "or) 0Intangi4!2

0/tic3y2 Product$ 5 Cu$to+!r 0R!t!ntion2

WH- PRICING?

0Ho6 +uch?2 in !7chan

#on!ti8! 4y

Tra

#ini+

Eon

Thi$ i$ ho6 y


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NEW PRODUCT PRICING

T6o ty*!$ o1 *roduct$ I+itati'! *roduct$

Inno'ati'! *roduct$

R!;uir!$ di


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PRICING & PRODUCT VA(UEVA(UE ,A/ED PRICING


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PRICING & PRODUCT VA(UE

Big Value: Premium Pricing

Moderate Valu


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PRODUCT VA(UE #AP

Performance Index

TCO

High

Low

HighLow

Prod =

Prod =>

Prod

Prod @

Prod

Prod B

Prod Prod

Prod

Prod F

Prod ==

Fair-ValueLine


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PRICING EERCI/E = P(OT THE/E CO#PANIE/ IN TGRAPH

Performance Index

TCO

High

Low

HighLow

Prod =

Prod =>

Prod

Prod @

Prod

Prod B

Prod

Prod

Prod

Prod F

Prod ==

Fair-ValueLine

Int Airin!$ E+irat!$% ,riti$h(u1than$a

Airin!$ J!t Air6ay$% Indigo% G

J!t(it!


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PRICING & P(ACE A(IGN#ENT/CA(A,(E CHANNE( PRICING


12/36

PRICING & P(ACE

Traditiona $u**y Chain

0/urrou

KFL KLKF>L

9F>L 9L 9FL

unctiona Ro! K Ri$3 (!'!$ K A$$!t$ U$!d


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/UPP(- CHAIN WH- CHANNE( PRICING?

MVau! add!d R!$!!r "VAR) i+*act in rating$ 'i8% Muaity% D!i'!ry "/toc3 3!!*inday$)% /!r'ic!

P ! P" #$%&%' % ( % )*+

Wh!r! P' 5 VAR Pric!

P; 5 uot!d Pric!

5 uaity Rating

D 5 D!i'!ry Rating

/ 5 /!r'ic! Rating

K KD K/ 5 V!ndor Rating


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CHANNE( UNCTION & PRICING DECI/ION/


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/C PRICING #ETHOD/ CUP% RP#

Co+*ara4! Uncontro!d Pricing#!thod

R!$a! Pric! #!thod R!$a! Pric!"R/P) Pric! at 6hich

Product O6n!r can $! "to !ndCu$to+!r)

GP# Gro$$ Pro:t #argin n!!d!d 1orth! R!$!!r% to co'!r

unction$ *!r1or+!d "!g%/a!$QPay+!nt *!riodQ#ar3!t D!')

Ri$3$ Und!rta3!n "!g% In'!ntory H!d)

A$$!t$ U$!d

TP Tran$1!r Pric! 1or th! 0R!$!!r2

O


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#U(TI CHANNE( PRICING

htt*QQh4$*har'ard!duQ+uti+!diaQa$h

/!;u!nc! th! Chann! – 4a$!d on

Cu$to+!r ,uying ,!ha'ior

-our ,u$in!$$ Prioriti!$ Q Pr!1!r!nc

Co+*!tition #!thod$

Chann! /!;u!nc! +ay 4! M=%F%

F% F% .n% n P!r th! 0Chann! /!;u!nc!2% th! V

unction$ *!r1or+!d "!g% /a!$QPD!')

Ri$3$ Und!rta3!n "!g% In'!ntory

A$$!t$ U$!d

!!d!r to n!7t Chann! (!'!$

#aintain th! Pric! (!'!$ S Chann

"un!$$ +ar3!t dyna+ic$ chang!)

http://hbsp.harvard.edu/multimedia/flashtools/channelmargins/http://hbsp.harvard.edu/multimedia/flashtools/channelmargins/


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PRICING & /UPP(- CHAIN "PEP/I INDIA CHANNE()

htt*QQ666$

http://www.scribd.com/doc/28578846/Pepsi-Distribution-Channelhttp://www.scribd.com/doc/28578846/Pepsi-Distribution-Channelhttp://www.scribd.com/doc/28578846/Pepsi-Distribution-Channelhttp://www.scribd.com/doc/28578846/Pepsi-Distribution-Channel


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PRICING & PO/ITIONINGPRE#IU# PRODUCT/ WITH PRE#IU# PRICING


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PRICING & PRODUCT PO/ITIONING

Wa$t! o1+on!y

Coo

Knowing what your target customer perceives a

valuable is essential to setting a price…

U/ F%>>>


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PRICING & PO/ITIONING

/!g+!nting

Targ!ting

Po$itioning "/TPProc!$$)

&

Pricing

Pric! (!ad!r "(o6 Pric! /trat!gy – to addr!$$

Con$ciou$ ,uy!r$)

Pr!+iu+ Pro'id!r "High Pric! & uaity $tratattract cr!a+)

#!9Too Pricing "acro$$ a $!g+!nt$ – $*r!ad


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PRICING TO COUNTER PIRAC-PIRAC- /TAGE/ & PRICING /TRATEGIE/


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PRICING & PIRAC-


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/tag! =

Want to u$!Q4uying

/tag! F

Co$t o1 Pirati

Product

PIRAC- /TAGE/ & PRICING I#PACT #ODE(


24/36

PRICING TO COUNTER PIRAC-

PRODUCT EDITIONPRICING

Editioning in'o'!$ cr!ating th! co+*!t!*roduct and d!grading it?

I$ thi$ O?

-!$% i1 it i+*ro'!$ con$u+!r $ati$1action

H!*$ Con$u+!r to not to 1a 'icti+ toCount!r1!it

PRODUCT /A#P(EPRICING

Cu$to+!r$ 6i 4uy at Pric! "P) i1 th!ir utiity i$

non9n!gati'!

Cu$to+!r ha$ F choic! Pirat! "or) U$! (!ga/a+*!$

r!!Q(o6 co$t /a+*!$ to g!t th!+ ta$t! th! utiity"r!!+iu+ #od!)

Cu$to+!r $a'! on 0#ora Co$t o1 Pirating2 "int!rnaco$t o1 co++itting an i!ga acti'ity – Ch!a**a &

/hi'!ndu F>>a)

/a+*ing co$t Co$t o1 diXcuty o1 *irating "t!ch

& !ga 1actor$)

PRICING/TRATEGIE/

P!n!tratio

(o$$9(!ad

Pric! /3i+"G!n!rat!

4!1or! Cor!!a$! n!'!r$ion atr!duc! th!!ari!r '!r


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PRICING & VO(U#E PURCHA/E/EARN #ORE ,- /E((ING #ORE OR (E//


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PRICING & VO(U#E PURCHA/E

WH- VO(U#E PRICING

Pric! Ad'antag! 1

Pa$$ing Econo+i!$ o1 /ca! 4!n!:t$ to Cu

(arg! Cu$to+!r$ to g!t 4!tt!r *ric!$ "!7*!ct!d to 4uy

Incr!a

Cu$to+!r$ to i

G!t


27/36

ENA,(E VO(U#E PRICING

Vou+! Pricing Ty*!$

#uti9/t!* uantity Di$count$

T6o Part Tari< Di$count Pricing

Ti+! & (oyaty ,a$!d Pricing

#uti9Product Pricing

#uti9P!r$on Pricing

Pric! Guarant!!$


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TWO9TARI VO(U#E PRICING – CA/E /TUD-

G!r+an Nationa Rairoad

/tandard *ric! *!r +i! u$ing th! train i$ FY

,ahnCard i$ $od 1or a at 1!! o1 FF>

U$!r g!t$ a >L di$count in a train$1or = yr

,r!a3!'!n *oint "tota $a'ing$ 5

FF> card 1!!) i$ = +i!$ Onc! $*!nt th! FF> 1or th! card ar! $un3 co$t and th!r! i$ a $trong

inc!nti'! to +a7i+i8! it$ u$! a$ thi$ +!an$ $a'ing +or! +on!y

=+iion card$ ar! $od *!r y!ar% r!'!nu!$ ar! o'!r=4iion U/D


29/36

VO(U#E PRICING #ODE(/

A Unit$ Di$counting INCRE#ENTA( PRICIN

A9Unit$ Vou+! Pricing 9 Tota Pric! 4y Vou+!

A9Unit$ Vou+! Di$count 9 P!r Unit Pric!

Whi!!nticingth!cu$to+!r

to 4uy =>in$t!ado1 nin!% itactuayr!$ut$ inyou+a3ing

less

+on!y

Incr!+!nta Vou+! Pricing 9 Pric! P!

Incr!+!nta Vou+! Pricing 9 Tota


30/36

PRICING TO #IRROR ,U/INE// #ODE(PRICE(I/T RE(ECT/ ,U/INE//


31/36

PRICING TO #IRROR ,U/INE// #ODE(

MPRICING I/ A(#O/T NEVER A,OUT THENU#,ER

IT2/ A,OUT THE #ODE(


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WHERE DOE/ PRICING IT?

Part o1 th! ,u$in!$$ #od!

Ho6 do 6! +a3! +on!y?

Ho6 +uch +on!y 6! can +a3!?

R!'!nu! Q Pro:t Q or!ca$t "Pricing i$ th! 4a$! Unit)

Pricing /u**ort$ Cor! Vau! Pro*

Our Product $a'!$ you

.and 6! 6ant =L o1 that $a'ing$ "our Pric!)

Who ar! our Cu$to+!r$ & ho6 to r!ach th!+?

Dir!ct /!ing? Inc!nti'!$ Q Pric! di$counting !'!$ Q Pricing t!r+ !7i4iiti

Indir!ct /!ing? #argin$ Q R!4at!$ Q /*!cia Pricing R!;u!$t$

Ho6 ;uic3y 6! can co$! a d!a? Ho6 can 6! +a3! our Partn!r$ to $! 0;


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/ERVICE/ APPROACH TO PRODUCT

Forcing )erice a..roach to Product Mar/et0)"uare .eg in a round hole1


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PRICING EERCI/E F = #INUTE/

Ta3! a $a+*! *roduct

T! your Product /tory

What i$ th! Cu$to+!r Vau!? Ho6 did you 'aidat! Cu$to+!r Vau!?

Who i$ your co+*!tition? What r!ati'! 'au! your *roduct ha$ +or! than co+*!tit

/*!ci1y & Ju$ti1y your Product Pric! ";uantitati'!)

E7*ain your Organi8ation$ 4u$in!$$ +od! & *ricing aign+!nt "Di$counting Q Pro+


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/U##AR-

Product Vau! #a* 0h!*$2 $!tting th! right *ric!

Chann! Pricing to 0$ca!2 your Product Ado*tion

#uti9Chann! Pricing !na4!$ chann! ay!r$ to 01!!d O**ortuniti!$2 to oth!r

Pricing aign$ and 0con:r+$2 Product Po$itioning

Right Product /trat!gi!$ & Pricing !

-our r!$ut$ Business Grow


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THAN -OU/HIV#Z#ICRO/OTCO#

A in1or+ation contain!d in thi$ *r!$!ntation ar! 4a$!d on th! *!r$ona r!$!arch & !7*!ri!nc! o1 th! *r!$!nt!r Th! d!c3 i$ *r!*ar!d 1or *r!$!nting at IP#A% ,angaor! 1or it$ +!+4!r$% $o!y 1or 3no6!dg! *ur*o$!$ ony
mailto:[email protected]:[email protected]

product pricing # ipma session apr 27

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