Strategic Pricing

The Program includes these main themes:

• Pricing Strategy - Days 1 & 2

  Align Strategic Pricing With the Company's Goals and Objectives:
  Ensure alignment with overall pricing strategy across a diverse set of functions within the organization.

  • Articulate your meaningful and sustainable advantage (MASDA) and identify your customer's compelling reason to buy
  • Develop a value-based pricing mindset that promotes an 'outside-in' rather than an 'inside-out' approach that will shape your pricing strategies and tactics
  • Evaluate your organization's pricing strategy development process
  • Evaluate value-based pricing into an actionable cross-functional capability within your organization
  • Design a structured and disciplined framework for a value-based pricing process
  • Use the framework to ensure alignment between business and pricing strategy
  • Select and target your most profitable customers
  • Evaluate the competitive landscape by identifying and evaluating market opportunities, and limitations, that will shape your organization's future

  Effective Customer Pricing Alignment Tools:
  Learn highly-effective and leading-edge pricing tools and techniques to evaluate and ensure alignment between different customer purchases and price.

  • Use segmentation to characterize customers and gain insight into their purchasing behaviour and preferences
  • Evaluate and optimize your strategic business units and product lines aligning with the goals and the objectives of the company
  • Define customer segment by differentiating on value
  • Use Net Price Analysis to pick your winners and losers
  • Evaluate the discounting and incentive behaviour provided to different customers
  • Identify the 'soft-dollars' contributing to profitability differences across customers
  • Set price levels aligned to value received
  • Establish price rules, metrics and price fences
  • Define the pricing strategy desired, either skimming, neutral or penetration
  • Use targeted discounting structures instead of across-the-board price reductions

  Value-Based 'Outside-In' Pricing Tools and Techniques:
  Assess and evaluate a variety of pricing tools and frameworks that suit your organization.

  • Simulation exercises - competing on price conducted over the Internet and using laptops
  • Capture and measure the elasticity of demand for products and services relative to the competition
  • Manage price and perceptions
  • Develop the 'right' pricing and value approach to customers
  • Measure your brand equity
  • Quantify the value perceptions held about you and your competitive offerings
  • Identify the value drivers that contribute to share growth and profitability
  • Use competitive intelligence to anticipate customer and competitive responses to proposed offerings

  Explore the Key Ingredients that Contribute to a Compelling Pricing Strategy

  • Understand what customers truly value in a downturn
  • Create 'fences' between product offerings
  • Identify whether you are in a leadership or followership position
  • Evaluate and price your competitive advantages
  • Develop bundling strategies to avoid price transparency
  • Offer special services for free

  Implement significant decisions quickly and effectively and gain support throughout the organization

  • Build in accountabilities across functions within the organization
  • Identify key success factors and ensure measurement mechanisms are in place
  • Communicate the price/value proposition
  • Make the case to marketing, sales, operations and finance to ensure you get the resources you need
  • Choose correct channel and distribution partners
  • Ensure a process is in place to account for and clearly explain differences in pricing across similar customers
  • Ensure policies and process are in support of each other
  • Build a process to identify, approve and manage exceptions to pricing policy
  • Ensure information systems provide the data needed to perform the required analysis

• Software and Tools - Day 3

  Module 1: Frameworks
  Review the frameworks used in pricing strategy and tactics that are implemented in software systems.

  • Value Maps and the Value Equivalency Line
  • Economic Value Estimation®
  • Pocket Price Waterfall
  • Price Distributions
  • Segmentation
  • Pricing Strategies
  • Integrating Value x Price x Cost x Demand
  • Evolution of pricing models

  Module 2: The why and where of pricing data
  Understand data acquisition and analysis as these are critical to modern pricing best practices and to the effective use of pricing software.

  • The Role of Data
  • Internal Data Sources
  • The Internet and Linked Open Data
  • GoodRelations – a data format transforming retail pricing and its future impact on B2B
  • Other data sources

  Module 3: Pricing Software
  Software has become central to the development and execution of a pricing strategy. We will look at the major types of pricing software and the various roles that they play. We will also consider the role of other business systems in pricing and integration issues.

  • Transactional Pricing Management Software
  • Value Management and Value-Based Pricing Software
  • Contract Management Software
  • Integration with Marketing Automation
  • Integration with CRM

  Module 4: Case Studies and Exercises
  Test the frameworks with real world problems and think through how one would use software in each case. Ask ourselves "Which frameworks are applicable?" and "What role will software application play in developing a strategy and executing it in the market?"
  (The case studies may be modified depending on the needs of participants.)

  • Case Study 1: Pricing a New Product Platform for Industrial Equipment (Value Modeling; Segmentation)
  • Case Study 2: Responding to Changes in Commodities Prices for a Value-Added Product (Value Model; Value x Price x Cost x Demand)