4 Steps to Pricing to Value

Pricing to Value

You may not be achieving the optimal price for your products, given your business objectives, competitive environment, and the value your customers have for your brands, products, and services.

Pricing to Value Workshop

We provide your business with a framework and hands-on support to develop a pricing strategy to

  • Define the best price to offer for your products and/or services
  • Identify the most effective implementation approach
  • Design and implement future price changes

Upon completion, you will have all the tools you need to establish pricing policies that deliver earnings today and assure the long-term health of your business.

What We Do

  • The Structure of a Pricing Strategy
    • Price, Cost, and Earnings
    • Competitive Reactions and Intelligence
    • Market Strategies
  • Customer value and Price Sensitivity
  • Measuring the Market
    • Concept Testing
    • Choice Measurement
    • Value Measurement
  • Pricing Strategy Tools
    • Marketing Triangle
    • Price-market Simulators
  • Value Mapping and Positioning

How to Get There

The key to developing a successful pricing strategy is the understanding of the market (price sensitivity) and the potential competitive situation for your business.

    • Identify and define effective underserved segments of the market, where independent pricing policies are feasible.
    • Quantify the market demand using data from the market you want to serve:
      • Understand the purchase process and the buyers’ consideration sets
      • Understand customer and user value
      • Measure price sensitivity against alternatives
    • Define the business situation:
      • Generate compelling market views (price modeling and value mapping)
      • Determine the cost structure and that of competitive alternatives
      • Integrate competitive intelligence into your profile of the market
  • Develop the effective pricing strategy

Our process has been successfully used by DuPont, Xerox, and other businesses for a number of years and represents a highly analytical and quantitative “best” practice.

Making It Work
Pricing to Value results are actionable. That means you end up with an actual pricing strategy for your business. Three things are required to engage your internal resources:

  1. A pricing to value strategy session to to introduce the market-based principles of analytical pricing strategy formulation to your organization
  2. Consultation with specific groups (management, strategy and data analytics teams) to design the collection of the right market data
  3. Data collection and subsequent analysis. The actual field work should be done by an external, professional marketing research firms chosen by the business
  4. Functional workshops, including leadership, to build out your pricing strategy by business and market segment

Pricing Strategies

All derived from market-based research, analytics and strategy tools.

  • Single product pricing
  • Strategic alternatives for
    • Distribution channel pricing based on end user demand
    • Joint products and cannibalization when multiple products are offered in the same market
    • Market uncertainty and risks using scenario planning in the competitive environment
    • Integrating marketing and pricing strategies across segments and product lines

The best price should nearly maximize earnings while also

  • Striving to maintain or grow market position (share)
  • Discouraging adverse competitive actions or entries
  • Supporting the distribution channel
  • Allowing sales discount initiatives for potential mass market opportunities

Deliverables

  • A basis for establishing pricing policies by product and market segment
  • Actual research that validates the pricing policies
  • A framework for future/ongoing pricing validations and decisions
  • The financial impact of making a pricing change
  • Action plans to test, implement, and obtain and capture feedback on pricing changes

We are happy to hear about your business and share examples of recent pricing work.

Contact Us

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