National University of Management

MBA, Marketing

Pricing strategy“Value-based sales and negotiation”

Influencing customer behavior

By: Bo Bunrath

2016

2

Value: The basis for policy-driven pricing;Doing the damageUnderstand buying center

Types of buyer and their negotiation strategies; Negotiating with price buyers Negotiating with relationship buyers Negotiating with value buyers

Managing sales force toward value based pricing;

Content

3

Value: what they need and what is it worth to them?;

The buying center: who influence the purchase decision?;

The deal: what should we offer?; and The negotiation: how will we make this

profitable?

Content (cont.)

4

Company make much investment to anchor pricing to value.

Price must deliver value to customers. Communicate value delivered to decision

maker/buyers.

Value: The basis for policy-driven pricing

5

Force low price customer to make trade-offs, never accept price without demanding something in return.

When negotiating with customers who are paying above average, commit to giving them your best and educating them as to what they are getting.

If some low price customers won’t accept a lesser product-service bundle commensurate with low price they receive, walk away from business to protect integrity of the price structure.

Value: The basis for policy-driven pricingDoing the damage

6

Introduce fixed price first on new product and service, retaining negotiable pricing only for the more commodity product.

Change sales force compensation to reward salespeople make profitable sales, not just sales revenue.

Make price concession temporary and up front in return for getting low price customer to the mean.

Value: The basis for policy-driven pricingDoing the damage (cont.)

7

Value: The basis for policy-driven pricingUnderstand buying center

8

Effective negotiator must know the various buying behavior associated with difference type of buyers and their purchase agendas. They are price, relationship, and value buyers.

Types of buyer and their negotiation strategies

9

Know what they want to buy and selecting base on price, publishing required specs and soliciting bids.

Types of buyer and their negotiation strategiesNegotiating with price buyers

10

They prefer brands with reputations and suppliers with whom they have had prior positive experience. They value consistent product quality and performance, and rely on trusted suppliers to continue providing it.

Types of buyer and their negotiation strategiesNegotiating with relationship buyers

11

They strive to maximize economic value delivered for the price they pay. They make purchase decisions by carefully weighing attribute and analyzing trade offs, ultimately purchasing product offering the greatest difference between satisfaction with purchase and dissatisfaction with price.

Types of buyer and their negotiation strategiesNegotiating with value buyers

12

Account planning: sales force need to learn or relearn about value, talk about value, not price with customers.

Managing sales force toward value based pricing

13

What needs motivate customer to purchase? How do product, service, support differ from

anything else the customer could make or buy to satisfy that need?

What benefit/problem could result for the customers from difference?

The value: what do they need and what it is worth to them?

14

What kind of buyer we are really dealing with? (price, loyal, value, convenience)

Who does the purchase? Is the person aware of benefit and value?

What are the keys purchase criteria? Who established or influence this criteria?

The buying center: who influence the purchase decision?

15

What package or product/service combination meets this customer’s needs?

What package or product/service we should offer to this customer?

What discount?How does that discount relate to those offer to

others?How will you convince this customer that

discount is fair?

The deal: what should we offer?

16

How might this customer use manipulation and misinformation to avoid paying for value?

What product/service option could we eliminate to reduce the cost to the customer?

What other trade off would we be prepare to offer?

The negotiation: how will we make this profitable?

17

Thanks you!!!

Q&A