[Pricing Strategy]
The Value Approach:
Raise prices without resistance
In a recent interview with Korea’s Dong-A Business
Review magazine, Paul Hunt, President of Pricing
Solutions Ltd., talked about the impact of pricing on
company revenue, and the journey to long-term
pricing improvements. Paul’s conversation appeared
in the January 2013 edition of DBR Magazine. To
view the full article, click here.
Article At-A-Glance
Companies run the risk of developing a false
sense of security when pricing becomes too
routine. Paul Hunt explains how pricing
excellence requires continuous monitoring,
feedback and improvement. He describes the
process in terms of the 5 Levels of World
Class Pricing (Table 1). A company’s journey
through the 5 Levels can include a variety of
pricing & value research, tools and techniques
including the Pricing Diagnostic Scorecard and
Price Volume Optimizer. Paul explains how
businesses can use these tools to overcome
difficult pricing challenges.
Inset: DBR Dong-A Business Review, January
2013, Issue 1, No. 120, www.dongabiz.com
Paul
dis cus s e s
‘Cu s t ome r
V alu e ’ ,
psychological reluctance, perceived risk in
pricing, pricing diplomacy and cultural
influences in pricing.
Table 1: 5 Levels of World Class Pricing
Level 1
Firefighter
Companies at Level 1 adjust prices regularly, using price discounts and increases to meet short term objectives
Level 2
Cost-plus or ‘Last Year’ pricing is typical
Level 3
Partner
Pricing efforts are coordinated between sales, finance, marketing and other internal departments; the focus is on
‘customer value’
Level 4
Companies use pricing software and tools to optimize pricing
Policeman
Scientist
Level 5
Master
Pricing is both a science and an art! Level 5 companies have
the necessary Strategy & Management, Research & Analytics, People & Organizations and Systems & Tools in place
to maintain pricing excellence
To view the full article, click here!
Original article appearing in DBR Dong-A Business
Review, January 2013; Issue 1; No. 120