Pricing strategy, setting price base on value

1. National University of Management
MBA, Marketing
Pricing strategy
“Value-based sales and negotiation”
Influencing customer behavior
By: Bo Bunrath
2016

2.  Value: The basis for policy-driven pricing;
 Doing the damage
 Understand buying center
 Types of buyer and their negotiation strategies;
 Negotiating with price buyers
 Negotiating with relationship buyers
 Negotiating with value buyers
 Managing sales force toward value based pricing;
Content
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3.  Value: what they need and what is it worth to them?;
 The buying center: who influence the purchase
decision?;
 The deal: what should we offer?; and
 The negotiation: how will we make this profitable?
Content (cont.)
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4.  Company make much investment to anchor pricing to
value.
 Price must deliver value to customers.
 Communicate value delivered to decision
maker/buyers.
Value: The basis for policy-driven pricing
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5.  Force low price customer to make trade-offs, never
accept price without demanding something in return.
 When negotiating with customers who are paying
above average, commit to giving them your best and
educating them as to what they are getting.
 If some low price customers won’t accept a lesser
product-service bundle commensurate with low price
they receive, walk away from business to protect
integrity of the price structure.
Value: The basis for policy-driven pricing
Doing the damage
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6.  Introduce fixed price first on new product and
service, retaining negotiable pricing only for the more
commodity product.
 Change sales force compensation to reward
salespeople make profitable sales, not just sales
revenue.
 Make price concession temporary and up front in
return for getting low price customer to the mean.
Value: The basis for policy-driven pricing
Doing the damage (cont.)
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7. Value: The basis for policy-driven pricing
Understand buying center
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8. Effective negotiator must know the various buying
behavior associated with difference type of buyers and
their purchase agendas. They are price, relationship,
and value buyers.
Types of buyer and their negotiation strategies
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9. Know what they want to buy and selecting base on
price, publishing required specs and soliciting bids.
Types of buyer and their negotiation strategies
Negotiating with price buyers
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10. They prefer brands with reputations and suppliers with
whom they have had prior positive experience. They
value consistent product quality and performance, and
rely on trusted suppliers to continue providing it.
Types of buyer and their negotiation strategies
Negotiating with relationship buyers
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11. They strive to maximize economic value delivered for
the price they pay. They make purchase decisions by
carefully weighing attribute and analyzing trade offs,
ultimately purchasing product offering the greatest
difference between satisfaction with purchase and
dissatisfaction with price.
Types of buyer and their negotiation strategies
Negotiating with value buyers
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12.  Account planning: sales force need to learn or relearn
about value, talk about value, not price with
customers.
Managing sales force toward value based
pricing
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13.  What needs motivate customer to purchase?
 How do product, service, support differ from
anything else the customer could make or buy to
satisfy that need?
 What benefit/problem could result for the customers
from difference?
The value: what do they need and what it is
worth to them?
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14.  What kind of buyer we are really dealing with? (price,
loyal, value, convenience)
 Who does the purchase? Is the person aware of
benefit and value?
 What are the keys purchase criteria? Who established
or influence this criteria?
The buying center: who influence the purchase
decision?
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15.  What package or product/service combination meets
this customer’s needs?
 What package or product/service we should offer to
this customer?
 What discount?
 How does that discount relate to those offer to others?
 How will you convince this customer that discount is
fair?
The deal: what should we offer?
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16.  How might this customer use manipulation and
misinformation to avoid paying for value?
 What product/service option could we eliminate to
reduce the cost to the customer?
 What other trade off would we be prepare to offer?
The negotiation: how will we make this
profitable?
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17. Thanks you!!!
Q&A
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