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The fundamental concern for service-based businesses is that each project is different and requires some variance in price and components. The vogue of productizing service offerings alleviates some of the natural envy toward product brands that can quickly adapt to the widening range of consumer demand, but that presents its own hurdles.
More In terms of market segmentation alignment, different customers receive different benefits (perceived or real) from the same or similar product. This drives variation in willingness to pay. One goal in improving a price structure is to improve the match between the willingness to pay and the price extracted. It is a form of price segmentation.
More Value-based pricing talks about pricing based on whether a product provides more or less perceived value with respect to the next best alternative. In the case of professional services however there is a slight difference — since there is the “human touch” involved we can’t be sure whether the next best alternative is a true alternative at all.
More Given the current currency fluctuations and country specific economic situations, what problems do they create for firms and how are prices supposed to be managed across boarders today? These are the pertinent questions facing many of today’s executives.
More Enter the age of Market Segmentation – totally efficient and totally cost effective. But now market segmentation has so proliferated that we have now entered the age of “ultimate segmentation,” as illustrated by the major hotel chains.
More Cost-plus pricers believe in understanding the cost of making a product and then adding a profit margin on top of the cost to arrive at the price of the product. Value-based pricers on the other hand are not keen at looking at cost or a target mark-up. Instead they focus on realizing the value that the product brings to the customer and then pricing it according to the value.
More The millennials are the first generation to be born with computers in virtually every household. They buy online and they can compare price and quality of shopping goods online as well. These factors carry enormous implications for retailers in shopping malls, according to Lal and Alvarez.
More Innovation is clearly on many corporate agendas. And it is not surprising. Companies don’t grow by cost cutting alone. They grow through innovation. But how? And what are the implications of this innovation driven agenda?
More I met a person who hated value based pricing last week. He was in procurement. Where can a value-based pricing advocate find agreement with an anti-value based procurement officer?
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“Congratulations to Hifikepuny Pohamba, Namibia President (2005-2015) for winning the 2014 Mo Ibrahim Prize for Achievement in African Leadership. Only the fourth…
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