Achieving Higher Profits By Pricing Management Using...
Well Business Pricing Management®
Profitable pricing management is based on value management – understanding what drives target customers’ business and creating offerings that deliver unique value. A strategy that encompasses value creation and delivery across the entire business is a pre-requisite to profitable pricing management.
But as important as value based pricing strategy is, by itself, it is insufficient. To achieve world class pricing results, managers must develop superior execution skills. Implementation of the strategy is critically important – every bit as important as building strategy.
To achieve world class pricing results, managers must actively manage how they interact with their customers and with their markets. Our philosophy is:
“Firms must actively manage the value exchange with target customers and actively manage how they interact with their industry if they want to profitably paid for their business activities.”
World Class Pricing’s Well Business Pricing Management® process looks at the entire marketing effort to build and implement profitable pricing strategies (see our white paper for more details on the Well Business Pricing Management process). Rather than treat the symptoms of poor price performance, Well Business Pricing Management looks at underlying marketing practices and is aimed at eliminating those activities that destroy profitability. Well Business Pricing Management addresses strategy development and implementation in these areas:
- Customer segmentation and targeting.
- Customer value definition.
- Offering design.
- Market communication.
- Customer negotiation.
- Price determination.
- Competitive management.
- Resource allocation.
The focus is on active management of strategy and implementation, rather than reacting to customer and competitor initiatives.
Active management of pricing strategy involves management of three components:
Profitable pricing strategy is founded in the interactions of these three strategy components.
But managers also need a context for implementing their pricing strategy – driving superior execution skills. Development of active strategy requires the development of active implementation skills and processes. World Class Pricing helps clients manage implementation by focusing on these organizational activities:
Active strategy implementation integrates activities across the marketing function, focusing on eliminating roadblocks to profitability.
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