Pricing: Strategy and Tactics
Learn how to strategically manage pricing to defend or increase your profitability, even in highly competitive markets.
Too often, managers treat pricing as a tactical problem. By pricing to cover costs, they undermine profit. By pricing for competitive advantage, they undermine value. In fact, pricing products and services is a strategic challenge that requires insight, analysis, and perspective.
This program introduces senior managers and executives responsible for pricing decisions and approvals to the theory and techniques needed to understand strategic pricing and implement it in their own organization. The program will help you use price to achieve strategic objectives, successfully introduce new products to the market, respond to significant price competition, achieve prices that reflect the true value of your products.
By attending this program, you will:
- Explore the real financial implications of pricing decisions and when it makes sense to compete on price and when it doesn't.
- Learn how to change customers' price perceptions to capture more value and determine which alternatives to price competition are appropriate for your business.
- Use pricing to strategically guide a business to long-term profitability, rather than reacting to solve short-term challenges.
Strategic versus Tactical Pricing: Asking the Right Questions
- Why pricing "to cover costs" undermines profit
- Fundamentals of value-based pricing
- Creating value - the use of EVC
- Communicating value and value maps
- Why pricing "to achieve sales goals" wastes profit
- Why pricing "for competitive advantage" undermines value
Costing and Financial Analysis
- Determining the relevant costs for pricing
- Incremental costing versus fully allocated costing
- The importance of contribution margin
- Calculating break-even sales changes
- Analyzing the profitability of price changes
Managing Price Competition
- Mastering the pricing "game" and planning for profitable competition
- Using information strategically
- Managing resources for competitive advantage
- Understanding the legal issues in pricing
- Understanding how customer information processing strategies affect price perceptions and judgments
- Determining effective pricing communication tactics
- Managing customer risk to maximize value
Strategic Pricing Tools and Application
- Determining the product/service economic value
- Creating tiered offerings to drive margin and growth
- Using price analytics to identify opportunities for policy and process change
Setting Profit-Maximizing Prices
- The role of value
- Segmented pricing
- Accounting for price sensitivity factors
- Using price to achieve strategic objectives
- Managing price over the life cycle
- Building a pricing capability
- Road map for transitioning to strategic pricing
- Planning for organizational change
Who should attend
This program is designed for senior managers and executives of companies who analyze, recommend, or approve pricing decisions. It is especially valuable for directors of marketing, finance, sales, and planning and for managing directors and presidents of smaller companies who are introducing new products, facing significant price competition, or failing to achieve prices that reflect the value they deliver.