Value Based Pricing: Developing Your Pricing Based on Customer Value

Value Based Pricing: Developing Your Pricing Based on Customer Value
Pricing on Customer Value is based solidly on the principle of â€OEexchanging something I value for something you valueâ€�. Effective negotiation, based on trust, makes the exchange fair and mutually beneficial.
Contemporary pricing approaches generally fail to create mutual benefit. The frequent result is poor profit performance, contentious (often acrimonious) relationships in the market between buyers and sellers and premature commoditisation of otherwise excellent products and services.
There is another way! Pricing on Customer Value is a new approach to pricing. In this approach we start with a full understanding of â€OEwhat really mattersâ€� to our customer, and how his needs are being met in the market place right now. From this analysis we construct a solid and defensible value proposition differentiated from the competition. We use Value Pricing tools and methods to create and deliver a pricing proposition that fully captures customer value. This generates much better quality of business and a basis for building long term customer relationships based on trust.


Course Objectives

• Analyse insightfully the effect of market forces on planned pricing initiatives
• Assess the profit impact of alternative pricing strategies and tactics
• Maximise the value of their product/service to their customers
• Build powerful and compelling Value Propositions
• Assess the price and share impacts of value decisions
• Construct a viable customer value price
• Implement Customer Value Pricing in their own organisation

Who will the Course benefit?
Brand and Product Marketing Managers, Market Analysts, Sales Managers, Key Account Managers, Pricing Managers, Accountants, and any others with an interest in, or a responsibility for, pricing their organisation†s products and services.


Course Duration
3 days


Course Content
DAY ONE

Market Forces and Pricing
-Â Market forces and pricing
-Â Price levers
-Â Exploiting the Demand Curve
-Â Implications of market share
-Â Dangers of uncontrolled discounting
-Â Causes, prevention and cures of commoditisation
-Â Case Study/Discussion
Critical Review of Pricing Methods
-Â Strategic and operational objectives of pricing
-Â Cost Based pricing
-Â Competition based pricing
-Â Market Based Pricing
-Â Customer Value Based Pricing
-Â Sign-posting - When to use each method
-Â Assessing strategic and profit impact
-Â Case Study/Discussion

DAY TWO

Pricing and Value
-Â Defining value rigorously
-Â Identifying and using Value Drivers
-Â Enhancing Customer Value
-Â Case Study/Discussion
Analysing the Market
-Â Market Value Drivers
-Â Segmenting the Market on Value
-Â Fair Value and what it means
-Â Case Study/Discussion
Building the Value Proposition
-Â Value triad
-Â Researching the customer
-Â Spidergram and other charting methods
-Â Building a unique Value Proposition
- Quantifying the benefits â€" crafting the win-win
-Â Case Study/Discussion

DAY THREE

Structuring the Customer Value Price
-Â Goal of Value Based Pricing
-Â Calculating the Customer Value Price
-Â Negotiation corridor
-Â The CVP Worksheet
-Â Case Study/Discussion
Value Based Pricing Methods
-Â Bundling Methods
-Â Line Pricing Methods
-Â Non-linear Methods
-Â Other Methods
Implementing Customer Value Pricing
-Â Good and Bad business management
-Â Pricing Objectives
-Â General Management and Pricing
-Â Product Manager and Pricing
-Â Selling, negotiation and Pricing
-Â Accountants and Pricing
-Â Process to implement Pricing on Customer Value

Extended Case Study
Participants will apply the tools, techniques and concepts systematically in analysing a complex case, diagnosing strategic and pricing problems and recommending and evaluating alternative courses of action and making viable price recommendations.
For in-company courses, this can be developed into a practical, interactive workshop using state of the art strategic pricing models and methodology to create really powerful pricing solutions for clients.

PL0685 - Value Based Pricing.pdf