Description
pricing and related strategies for B2B marketing.
Industrial Pricing
Road Map
? Pricing Strategy ? Pricing in Industrial Markets ? Controls ? Influencing factors ? Pricing Strategies ? Price analysis
? Examples
? Industry Examples
? ? ? ? ? ? NPD Cost-benefit Analysis & ROI Budgetary pricing Bidding Government Quotations filling Entertainment pricing
Pricing Strategy
? How does a company decide what price to charge for its products and services? ? What is “the price” anyway? doesn’t price vary across situations and over time? ? Some firms have to decide what to charge different customers and in different situations ? They must decide whether discounts are to be offered, to whom, when, and for what reason
Pricing in Industrial Marketing
? In price competition, a seller regularly offers products priced as low as possible and accompanied by a minimum of services. ? In non-price competition, a seller has stable prices and stresses other aspects of marketing. ? With value pricing, firms strive for more benefits at lower costs to consumer. ? With relationship pricing, customers have incentives to be loyal-- get price incentive if you do more business with one firm.
Control of Price
Market needs Customer Values Manufacturing costs Competition Economic Conditions
Government Regulations
Reseller profit margins
Influencing factors
Internal
? Costs ? Product-line
External
? Demand ? Competition
? Marketing Strategy
? Management Judgement
? Channels
? Product life-cycle
?
?
Economic conditions
Politico-legal system
Pricing Strategies
? Product mix pricing strategies
? Holistic approach ? Consider different products, their costs, competition & demand
? Product Life – Cycle Considerations
? Decisions based on product life-cycle ? Market Penetration & Skimming
? Technology Adoption cycle ? Pricing strategies over business cycle
? Based on an assessment of general economic environment
? Pricing Strategy influenced by Government ? Competitive Pricing strategies
? Bidding & negotiating strategies
Pricing Analysis
? ? ? ? ? ? ? Break – even analysis Return on investment Expected pay-off Analysis Competitive Bidding & Negotiation Cost Benefit Analysis Budgetary quote Final quote
Industry Examples
India Gypsum –
? Only manufacturer of Gypsum board in India ? Part of Saint Gobain Group Co, one of world’s 100 largest industrial group and the world no. 1 in Building materials ? Pioneered Drywall construction techniques & concept selling in the building industry ? Manufacturing facilities at Jind, Chennai, Mumbai & Bangalore Business: ? Interior solutions provider in Wall partitions, Demountable partition systems, Wall Linings & Ceiling systems ? Product range – Gypboard, Gypsteel, Gypframe & Universal Plasters
Target Segmentation
Specifier
End User
Dealer Installer
Pricing Strategy – New Product
? Wonderwall
? De-mountable Partition consists of pre-laminated Gypboard ? Easy to assemble & maintenance free
? Universal Ceiling Board
? Designed for Residential Segments ? Smaller size boards
Derivative Pricing (B2B)
Nett Celebrity Fee: 1. Base – celebrity fee per film - % age of the same
Category A+
Base Fee per film 25 – 50 crore
% age 8%
A
B+ B C+
10 – 15 crore
5 – 9 crore 1 - 4 crore Below 1 crore
10 %
15 % 20 % 25 %
Base Fee
? 1. 2. 3. 4. 5. Base Fee Factors in Popularity Box Office Success Demand of Movies Supply of Actors Distributor confidence
Derivative Pricing (B2B)
Base Fee + Additions Eg. Shahrukh Khan
Base 8 % of 50 crore 4 crores
PR generated
25 % of base
1 crore
Box Office Success last 3 films
15 % of base
0.60 crore
Category – Brand - exposure (Airtel)
50 % of base
2 crore
Total
Approx
7. 5 crores
Derivative Pricing (B2B)
Base Fee + Additions Eg. Imran Khan
Base 15 % of 5 crore 0.75 crores
PR generated
25 % of base
0.19 crore (18.75)
Box Office Success last film
15 % of base
0.11 crore
Category – Brand - exposure (Airtel)
50 % of base
0.375 crore
Total
approx
1.425 crores
Thank you
doc_561146134.ppt
pricing and related strategies for B2B marketing.
Industrial Pricing
Road Map
? Pricing Strategy ? Pricing in Industrial Markets ? Controls ? Influencing factors ? Pricing Strategies ? Price analysis
? Examples
? Industry Examples
? ? ? ? ? ? NPD Cost-benefit Analysis & ROI Budgetary pricing Bidding Government Quotations filling Entertainment pricing
Pricing Strategy
? How does a company decide what price to charge for its products and services? ? What is “the price” anyway? doesn’t price vary across situations and over time? ? Some firms have to decide what to charge different customers and in different situations ? They must decide whether discounts are to be offered, to whom, when, and for what reason
Pricing in Industrial Marketing
? In price competition, a seller regularly offers products priced as low as possible and accompanied by a minimum of services. ? In non-price competition, a seller has stable prices and stresses other aspects of marketing. ? With value pricing, firms strive for more benefits at lower costs to consumer. ? With relationship pricing, customers have incentives to be loyal-- get price incentive if you do more business with one firm.
Control of Price
Market needs Customer Values Manufacturing costs Competition Economic Conditions
Government Regulations
Reseller profit margins
Influencing factors
Internal
? Costs ? Product-line
External
? Demand ? Competition
? Marketing Strategy
? Management Judgement
? Channels
? Product life-cycle
?
?
Economic conditions
Politico-legal system
Pricing Strategies
? Product mix pricing strategies
? Holistic approach ? Consider different products, their costs, competition & demand
? Product Life – Cycle Considerations
? Decisions based on product life-cycle ? Market Penetration & Skimming
? Technology Adoption cycle ? Pricing strategies over business cycle
? Based on an assessment of general economic environment
? Pricing Strategy influenced by Government ? Competitive Pricing strategies
? Bidding & negotiating strategies
Pricing Analysis
? ? ? ? ? ? ? Break – even analysis Return on investment Expected pay-off Analysis Competitive Bidding & Negotiation Cost Benefit Analysis Budgetary quote Final quote
Industry Examples
India Gypsum –
? Only manufacturer of Gypsum board in India ? Part of Saint Gobain Group Co, one of world’s 100 largest industrial group and the world no. 1 in Building materials ? Pioneered Drywall construction techniques & concept selling in the building industry ? Manufacturing facilities at Jind, Chennai, Mumbai & Bangalore Business: ? Interior solutions provider in Wall partitions, Demountable partition systems, Wall Linings & Ceiling systems ? Product range – Gypboard, Gypsteel, Gypframe & Universal Plasters
Target Segmentation
Specifier
End User
Dealer Installer
Pricing Strategy – New Product
? Wonderwall
? De-mountable Partition consists of pre-laminated Gypboard ? Easy to assemble & maintenance free
? Universal Ceiling Board
? Designed for Residential Segments ? Smaller size boards
Derivative Pricing (B2B)
Nett Celebrity Fee: 1. Base – celebrity fee per film - % age of the same
Category A+
Base Fee per film 25 – 50 crore
% age 8%
A
B+ B C+
10 – 15 crore
5 – 9 crore 1 - 4 crore Below 1 crore
10 %
15 % 20 % 25 %
Base Fee
? 1. 2. 3. 4. 5. Base Fee Factors in Popularity Box Office Success Demand of Movies Supply of Actors Distributor confidence
Derivative Pricing (B2B)
Base Fee + Additions Eg. Shahrukh Khan
Base 8 % of 50 crore 4 crores
PR generated
25 % of base
1 crore
Box Office Success last 3 films
15 % of base
0.60 crore
Category – Brand - exposure (Airtel)
50 % of base
2 crore
Total
Approx
7. 5 crores
Derivative Pricing (B2B)
Base Fee + Additions Eg. Imran Khan
Base 15 % of 5 crore 0.75 crores
PR generated
25 % of base
0.19 crore (18.75)
Box Office Success last film
15 % of base
0.11 crore
Category – Brand - exposure (Airtel)
50 % of base
0.375 crore
Total
approx
1.425 crores
Thank you
doc_561146134.ppt