Archives tagged: value-based pricing
In his classic 1982 text “The Mind of the Strategist”, Kenichi Ohmae fathered the 3 C’s model of corporate strategy. What can a veteran strategy book tell us about contemporary pricing strategy? Surprisingly, quite a lot.
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Tragedy to laughter in one word (read aloud with increasing speed): Yuck. Yuck yuck. …. Yuck yuck yuck yuck yuck yuck yuck…
More SaaS, DaaS, IaaS, and other “X-as-a-Service” business models are proven market disruptors in information technology industries. Executives at enterprise IT solution providers are creating, adapting, or adjusting to competitors’ XaaS business models. But successfully implementing an XaaS business model requires a new approach to both pricing and revenue capture for IT services. What is that new approach?
More In traditional sense “discrimination” is a word with a negative connotation. However, in the pricing context, by discrimination I mean that I will make some customers pay more and some customers pay less for the same product. However that is pure discrimination and by no means an art. Discrimination becomes an art only when all the subjects concerned accept the price they pay without a grudge.
More “I know he’s a good general, but is he lucky?” Napoleon Bonaparte Failures happen. The question is will you learn the right…
More Despite abundance of available and accessible literature, value-based pricing (VBP) as a concept remains mystified. The key reason is the difficulty of implementation. This article’s aim is to provide the reader a concise review of the ‘do’s and ‘don’t’s of VBP.
More Economic consumer theory represents how a demander allocates consumption behavior between two goods to maximize utility under constraints such as prices, time, and income. Consumer theory rests on the simple foundation that individuals are utility maximizing entities with the driven purpose to make tradeoffs depending on preferences and constraints. In this article, Curry Hilton examines price behavior for two substitutable goods.
More Is pricing out of touch with the market? Are salespeople frittering away profits? Are these two groups really at war with each other? Or, are they aiming for the same goal but language differences are preventing proper teamwork? Let’s review SPIN Selling from a pricing perspective.
More It’s once again that time of year where the kids are out of school, the stress of work is weighing us down and the thought of a relaxing getaway is on our minds. As we begin to investigate the options there are many factors we need to consider including costs, time constraints and of course destination. Unfortunately, a large majority of us don’t live in Hawaii, next to a four star resort or a world-class golf course. That means we have to get into a car, board a plane, find a train, ship or some other form of transportation to get to where we are going. After you consider all of the options – even with the inconveniences of security, over crowded flights and additional fees – you may find yourself with one viable alternative – air travel.
More Most pricing strategists would agree that having a low price is not a competitive advantage in and of itself. In fact, thinking that low prices are always a good strategy for competition is deeply misguided. However, at times, targeting low prices can lead to a strategic focus which delivers tremendous results. For example, Ikea, Wal-Mart, and Southwest Airlines all have low prices and profitably take market share. In this article, we will examine the flaws of assuming low prices is a good competitive strategy, then demonstrate how one firm, Southwest Airlines, redefined the product through target pricing to win the market profitably.
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