Pricing strategies examples 8051,advertising techniques in the 1990s,video email marketing service - Test Out

Strategic Marketing Science provides nine different strategies for Pricing based on product quality (see below). The reality is sometimes Strategic Pricing is contextual to competitive pricing or other uncontrollable factors. Organisational resources, marketing effort, and budget also play in selecting the best Pricing Strategy.
Advanced pricing strategy is about advanced marketing management: Real-time, for each individual segment! Value-based pricing uses buyers’ perceptions of value, not the seller’s cost, as the key to pricing.
For many industrial products, the costs perceived by customers extend well beyond the price charged. An industrial purchaser perceives the cost of equipment as including installation, maintenance, training and use of consumables, as well as the basic purchase price. Equipment purchases are evaluated over their economic lives and comparisons between competitors go beyond straight price assessment. The company bases its price largely on competitors’ prices, with less attention paid to its own costs or demand. In oligopolistic industries that sell a commodity such as steel, paper or fertiliser, companies normally charge the same price. The smaller firms follow the leader: they change their prices when the market leader’s prices change, rather than when their own demand or cost changes.
If you have read this far, you are probably ready to engage a pricing strategy marketing consultant.
Remember, "Procrastination is the thief of time" and the sooner you act, the sooner you'll achieve your goals! My initial blog on pricing strategy, ‘How To Set Prices To Seriously Increase Profit,’ was written to identify pricing as an under-utilized tool to drive your company’s bottom line. While there is recognition that market focused options are more effective in building longer-term profitability,  >80 per cent of companies continue to price their products or services primarily on the basis of costs or competitive prices. With Customer Based Pricing (sometimes referred to as Value Based Pricing), the seller makes decisions based on the estimated value of the product or service from the customer’s perspective. Well, let’s be honest, we’ll never know exactly what a given customer is willing to pay, but we can use experience and research to estimate what they are prepared to pay. Experience – If you’ve been doing this for a while, you’ve gathered a lot of data about your market.
The more you are able to apply your experience, the greater your ability to understand your customer’s willingness to pay. Simulation exercises in which customer price sensitivity, competitor reactions and other factors are considered. As you move into Customer Based Pricing, companies must fully understand the customer, their motivations, and what they value.
However, there are weaknesses to this pricing strategy, both for today’s ‘deal’ and for tomorrow’s ‘relationship’.
This approach can alienate those customers who pay more; it can be viewed as discriminatory. Customer Based Pricing can also lead to internal conflict between sales people (especially commissioned sales people) and other groups within the selling organization. Boardroom Metrics Marketing Consultants provide strategy and execution solutions for your inbound and outbound marketing objectives; including social media, branding, pricing and advertising.
We work with a number of startups and established companies, and when it comes to pricing a new product or service in the B2B market, it’s never an exact science.
B2B pricing strategies are fundamental when trying to finalize your go-to-market and sales strategies. What value (savings, liability reduction, additional revenue) can your solution provide and how much do your prospects value it? This crucial element should absolutely be factored into your B2B pricing strategies. As you can see from the real-life examples below, developing and solidifying a pricing strategy can take a number of forms.
A client of ours in the cleantech sector had identified a ballpark range to start with and from there the pricing was refined as we made calls and spoke to prospects. A client in the IT software development space sent out emails to their core network of contacts soliciting comments on his potential go to market B2B pricing strategies.
If you need help with developing a sales strategy, including B2B pricing assistance, don’t hesitate to contact me.

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Companies take a number of different approaches to establishing their pricing , but many wrongly assume that they have limited control on revenue and margin by using more effective pricing strategies. Businesses can implement different pricing strategies and tactics to maximize revenue and margin. Profit is always welcome of course, but some sales efforts will prove to be much more profitable to a company than others.
With these strategies in place, use observation and analysis to evaluate the success of new pricing strategies. Ultimately, the market will be the main driver in determining pricing, yet leaders are recognizing the importance of using value-based segmentation, market research and decision support to inform and enable their pricing strategies.
Since many organizations need help with pricing, I decided to write about different types of product pricing strategies, moving along a continuum from the simple to the more complex. With Customer Based Pricing, the seller makes decisions based on the estimated value of the product or service from the customer’s perspective. Differential pricing strives to identify customers with different valuations for your product or service.
Incidentally, while these two groups may share a similar need to be incentivized, it may not be at the same discount level. As you review each type of product pricing strategy, think about your situation … how is pricing viewed within your industry by your customers and by your competitors? PS – Following are links to the first two blogs in this series about types of pricing strategies: Cost Based Pricing and Competitor Based Pricing.
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Following is a table with some guidance on which costs you should consider for different decisions you would like to make.
Since pricing is a complex issue for many organizations, I decided to write a series of posts regarding different types of pricing strategies, moving along a continuum from the simple to the more complex.
Since this will likely result in variable pricing by customer or customer segment, this approach should deliver the maximum amount a company can charge for its product or service. In addition to tracking a variety of inputs, you’ve likely segmented the market by product, customer and competitor. How will they use the product, how do they segment their business, is this a strategic purchase or merely a tactical buy? If your customer suspects price discrimination, he will become more aggressive to secure a lower price.
A buyer who understands that pricing will be set on perceived willingness to pay has no incentive to appear attracted to the sellers product or value proposal. For example, in situations where there is aggressive negotiation, the salesperson may be inclined to offset the volume risk through price concessions. While willingness to pay will differ between customers, it may also differ within the same customer in diverse situations…. While this approach will theoretically maximize volume and profit, it’s important to develop and resource an ongoing process to gather, interpret and apply data. If you have a specific issue or question related to my expertise I am happy to share my thoughts with you. If you price too high you could be missing out on revenue, and if you price too low you could be short on profit. Also recognize that they may not be able to tell you exactly what they are paying today and their best interest may be to have you provide a better price than they are currently receiving today.
He has increased sales with a number of growing companies in a wide range of industries including business software, IT, telecoms, cleantech and industrial. Depending on the pricing models and business-specific circumstances, it may take some time to find the right balance. Buyer values can fluctuate based on the market competition, market sensitivity to pricing, and other challenges. In many cases, sales professionals might be pursuing volume over margin, and with poor pricing tools at their disposal, they likely give away revenue margin needlessly when adjustments to their discounting and other pricing actions might give them better guidance. Those marginally profitable segments may be turning over a net gain, but their consumption of resources could be taking away from other opportunities that offer greater pricing power and are even more profitable.
By closely observing the effects, you will gain insights into what’s impacting revenue and margin performance and you can fine tune your strategies. Our last blog covered Customer Based Pricing. This, and the next post will provide examples of different Customer Based Pricing strategies.

Companies must therefore fully understand the customer, their motivations, and what they value. It is a strategy whereby certain customers pay less for the same product than other customers.
Moreover, you may want to execute this price discount differently between each of these two groups, taking into consideration things like media habits (newspaper versus smartphone web browsing), differences in when or how the product is used and other factors that might better align your offer with the target groups consumption.
Differential Pricing and Volume Based Pricing are just two of several Customer Based Pricing options that are available to you , and we’ll cover more of them in my next post. Value based segmentation techniques talks about defining segmentation based on value placed by customers on the product. Is it a component of a commodity product they make, or a small element of a value added item they produce? Simply fill out the information below including when you would like to talk and we will make it happen.
In many cases though, especially when offering a product or service that is new to the market, I often find that to be truly successful from a pricing standpoint you need to have a degree of flexibility and an understanding that it may have to change. The key strategy is to enable your front-line sales team with the tools and insights needed to maintain optimal pricing. For companies that serve diversified markets, a one-size-fits-all approach can leave revenue opportunities untapped. Businesses should stratify their various segments by profitability and allocate resources to the most attractive segments.
I’ve included the following as executions of Customer Based Pricing for that reason … I primarily see them as having a buying decision predicated on some form of customer driven value. Perhaps you have segmented your customer base demographically, and determined your product or service can sustain a particular price based on certain income and age ranges.
If this discount scale is used on a short-term basis, it adds time and consumption (or resale) to the pricing equation. In addition to profitability, are there objectives around positioning, purchase cycle, brand penetration, etc? They may withhold important information, appear negative and comparison shop more aggressively. The selling organization needs to be committed to Customer Based Pricing, including the principle of ongoing research.
In some cases, your pricing model may be completely wrong and you’ll have to adapt and change on the fly. Segmentation around buyer business impact and value offers the flexibility to manage pricing differently across different segments, adjusting for those markets where the underlying business value justifies premium pricing. Companies should be on the lookout for tools and resources that can help sales reps handle these pricing considerations. Pricing should be an ongoing process that is recognized for its profit potential, both short and long-term. However, your research has also indicated there are fringe customers that have interest in your product, but need to be incentivized. It will indicate how the buyer views the value of your product when additional costs such as inventory carrying charges or additional warehousing fees are added to his cost of procurement. This kind of negotiation leads to a transactional approach versus the development of a long-term partnership.
When managed effectively, segmentation strategies can produce margin increases of 10 points, and sometimes more. From the seller’s perspective, using this sort of discount on a short-term basis may address certain operational issues such as excessive inventory or plant downtime. Your knowledge of the customer has guided you to maximize volume and price, and in this instance, the pricing is transparent to everyone. Volume based pricing is also an effective tool to use when negotiating annual contracts, as it may provide an incentive for the buyer to eliminate or limit the competitor’s product.

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