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Pricing Is NOT An Afterthought -Pt. 1

Pricing Is NOT An Afterthought 1.0Pricing Is NOT An Afterthought Pt. 1 - Leading Strategies For Pricing Early In The Product Development Process 

Original Whitepaper Content written by James Weaver
A leading luxury car maker performing an average of 100 additional safety tests than those performed on a non-luxury car. The company successfully sells the car in the market for $280,000. A well-known online retailer has one of the cheapest and most popular e-readers in the market at $79. What is the commonality between these two firms with wining products at different ends of the pricing spectrum? Both companies have given extensive thought to add value and pricing during the early stage of the product development process. The luxury car maker valued price and customer willingness-to-pay to determine a strong product concept that flows through subsequent phases. The high value proposition in turn helps to command a high price. On the other hand, an early pricing discussion on the e-reader helped the retailer create a robust product concept and a new product strategy-- low-priced products with a built-in feature to generate additional revenue streams by also being a live advertisement platform. Companies that incorporate pricing strategy early on are more likely to maximize the revenue potential and value of their products.
3 Pitfalls That Lead To Pricing Problems Companies typically invest in pricing and value management strategies late in the product development lifecycle, in the period just before the product launch. This trend is drive by three (3) common issues:  1. Incremental Development Mindset:  Many companies believe product development means adding a new feature to an existing product. Incremental development has its place when pricing products, but companies often default to cost-based pricing. Manufacturing cost and incremental customer value generated by the improvement cannot necessarily define the optimal price. 2.   Lack Of Clear Value Positioning When companies think beyond incremental product development, they often feel as though new product pricing is risky and uncertain. How should you price something that has never been sold before? Companies often rely solely upon anecdotes, gut feel and emotion to set price rather than incorporating value analytics. 3.    Limited Understanding Of Pricing Impact There is a general lack of understanding around the importance of the right price for new products. Companies are comfortable making significant changes to a product's price point after launch, once the market's reaction is determined. This inconsistency generates confusion among customers and across the industry as to the true value of an offering . For any business, price is the most powerful profit driver, and pricing mistakes can have long-lasting consequences. Next week (6.17.15): Pricing Is NOT An Afterthought Pt. 2 - Leading Practices In New Product Pricing SUBSCRIBE to The Pricing Authority Blog and NEVER miss a post! Continue reading

NEW Online Course Offering: Pricing Transformation With Joanne Smith

Announcing a NEW Online Course from PPS!

Pricing Transformation: Creating the Passion, Urgency, and Skill for Superior Pricing Across Business, Marketing & Sales

Course Description: Achieving superior pricing goes well beyond the price setting and analysis were typically done by the pricing organization. It requires a supportive company culture with a passion and urgency for pricing and profit enhancement, strong price execution motivation and skills throughout sales, the right pricing organization/structure, as well as the right pricing processes and systems. This critical part of a company’s pricing transformation is often overlooked or under invested in. Pricing leaders need to expand their role to include driving this broader transformation. This course covers many of the successful and practical strategies and tactics used by Smith as she led the DuPont Company’s pricing transformation. This course is targeted for business management and pricing leaders who desire to have a greater influence on the company culture and business, marketing and sales organizations to improve the company’s ability to deliver far greater pricing benefits. Attendees will learn:
  • How to influence company culture towards a passion and urgency for pricing excellence
  • How to influence sales for improved price motivation and execution
  • How to influence marketing for improved value creation and value-based pricing
  • How to influence business leaders towards business strategies that enhance industry pricing dynamics
  • How to understand and evaluate the pricing processes and systems needed for success.
About Joanne Smith:       Joanne Smith is the President of Price to Profits Consulting and author of The Pricing and Profit Playbook (Bradley Publishing - October 1, 2013). Joanne is a former DuPont Corporate Head of Marketing, Pricing and Customer loyalty. She was instrumental in creating the pricing organization which transformed DuPont from weak to outstanding pricing performance. She focused on raising the pricing competence of the marketing /sales organizations, influencing leadership behaviors to support pricing excellence, building pricing experts, running hundreds of pricing projects across diverse industries and implementing pricing processes/systems. She has integrated her business, marketing, and change management background into her pricing to develop new innovative approaches. Joanne brings over 20 years of global business, marketing, pricing and consulting leadership experience. She is best known for delivering superior results, challenging the status quo, leading and inspiring change and creating innovative solutions to complex business problems. Joanne often teaches or presents on marketing and pricing. Joanne achieved her Bachelor of Science degree in Chemical Engineering from Drexel University and completed Advanced Marketing and Sales Courses with Kellogg School of Management Program. She is a certified Six Sigma Champion, and previously lived in Europe advising in business and marketing strategy. Learn more about The Professional Pricing Society's online courses and REGISTER to take Joanne's course HERE. Continue reading

#PPSDALLAS: Spring Pricing Workshops & Conference Recap

During  May 5th-8th 2015 PPS hosted our 26th Annual Spring Pricing Workshops and Conference in Dallas, Texas at the Hilton Anatole hotel! Our attendees experienced a full day of educational Workshops and trainings, an exclusive PwC Reception at the AT&T Stadium, and two days of Conference activities filled with Pricing experts, industry insight, strategy shares and networking. We had an amazing time! View the Storify recap via Twitter, catching all the Tweets from start-to-finish below:   Look for more photos and recaps on our Facebook and Twitter pages! Join the conversation!  Continue reading
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