A good pricing decision is two-fold: One defines an aspirational list price and a commercial policy that deducts from this list price known discounts, which lead to the expected target prices by customer segment and perhaps channel.

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Product managers undoubtedly can be held accountable for the profitability of their portfolio. It is reasonably possible to make portfolio profitability a key performance indicator of a product manager. And it reasonable to make this part of their compensation package, thus holding them not only accountable but impacting their own economic condition based on the quality of the decisions they make.

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I have seen three or four multinationals, and four to six local suppliers sell the same core product in the same country, at roughly the same price. Because there is so much competition in these markets, customers ask for discounts and drive suppliers to bid against each other to win their business. It is hard to make a stable supplier business in these situations. How can one win? And, what does value-based pricing have to contribute to these markets?

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Our own research—that of Homburg, Jensen, and Hahn—as well as research by Hinterhuber and still other works by Liozu, repeatedly indicated firms that engage sales, marketing finance, and pricing leaders in pricing decisions outperform those that don’t. At this point, we may even call this settled managerial science.

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Can both product managers and salespeople have their incentives and key performance indicators aligned to the corporate goal: profits?  Yes.  They can and should, but it won’t be the same for both and we need to get specific. In my last article, Product Management v. Sales: Don’t Confuse Your Market, I explored how sales responsibilities…

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