Archives posted in: Pricing
For a company, a socket means a business. When they talk about winning a “socket” they mean winning a new business. For example let’s say a product uses a microcontroller – all microcontroller companies would be fighting to win the microcontroller socket inside that product and all other such products that use a microcontroller.
More At a certain level, the method of accessing a certain music track should be a commodity — it is the track that matters, not the delivery mechanism. Instead of differentiating on price, platforms are trying to do so with exclusive artist agreements and various extras for the consumer, as well as additional marketing support for the artist.
More In the price improvement strategy, firms develop the organizational capabilities to manage prices better. Pricing and discount management processes are developed. People are hired to drive those processes. Tools are acquired to accelerate achievements. Cultures are changed towards a profit and discount cautious mentality.
More Although reducing product contents, while maintaining price, remains a viable option for effecting a price increase, care should be taken to do it in a such a way to minimize the chances of a challenge on deceptiveness grounds.
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 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 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?
More When every opportunity is studied using Economic Value Models and priced totally based on the value delivered (and agreed upon with customer), we are heading towards a situation of easier wins leading to eventual revenue growth and market share increase.
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