Pages: 2

Pricing has become a key priority of every company globally. Inflation, raw material price volatility, new price models, and price as key lever to boost profits can be found daily in the news. Companies there need to understand how to transform their pricing to address all this.

Pages: 64

No chapter abstract available.

Pages: 24

This chapter explores the transformative success of subscription pricing strategies implemented by leading companies such as Alcatel-Lucent, Decathlon, and Traton. It begins by examining the historical evolution and rapid expansion of the subscription economy, a concept popularized by Zuora’s CEO, Tien Tzuo. The chapter then delves into the strategic shifts necessary for businesses to transition from traditional transaction-based models to subscription-based ones, emphasizing customer-centric approaches and continuous engagement. Through detailed case studies, the chapter illustrates how different companies have leveraged subscription models to achieve significant growth and operational efficiency. Alcatel-Lucent’s transition showcases the integration of connected services and vertical-specific offerings, while Decathlon and Traton highlight innovative approaches in consumer goods and heavy machinery sectors, respectively. The chapter also discusses the importance of organizational transformation, including changes in product development, marketing, sales, and financial management, to support subscription models. Finally, it offers a forward-looking perspective on the future of the subscription economy, predicting further market consolidation and the adoption of hybrid pricing models. The insights provided serve as a comprehensive guide for businesses aiming to thrive in the evolving landscape of subscription-based services.

Pages: 14

This chapter explores the strategic pricing shifts behind Philips Healthcare’s success, guided by insights from Daniel Cho, head of the Strategic Pricing Centre of Excellence. It details three transformative stories: the power of pricing analytics, the implementation of value-based pricing, and the importance of need-based segmentation. The first story highlights how establishing a pricing function with strong analytics helped Philips predict and influence margins, significantly improving the EBITA margin for the Indian Patient Monitoring Business. The second story focuses on the widespread training and application of value-based pricing, demonstrating its impact on customer segmentation and financial outcomes. The third story emphasizes the role of need-based segmentation, using Apple’s watch pricing strategy as a benchmark and showcasing how Philips applied similar principles to create differentiated pricing for in-hospital and out-of-hospital markets. Each segment underscores the necessity of understanding customer needs, behaviors, and value perceptions to drive successful pricing strategies. The chapter offers valuable insights and practical guidance for leveraging pricing analytics, value-based pricing, and strategic segmentation to enhance profitability and market positioning in the healthcare industry.

Pages: 7

This chapter delves into the advanced digital pricing models employed by Google to revolutionize revenue generation for SaaS and other digital products. It provides a detailed exploration of various digital pricing strategies, including subscription, tiered, freemium, and pay-per-use models. Each model is analyzed for its unique advantages and suitability for different types of digital products and services. The chapter highlights the importance of using data-driven insights and dynamic adjustments to optimize pricing strategies, ensuring they meet diverse customer needs and preferences. Key elements such as trials, which help convert potential users into paying customers, and the use of social proof and contrast to enhance decision-making are discussed. Additionally, the chapter covers the importance of pricing experiments, particularly A/B testing, to identify the most effective pricing strategies in different markets. Concepts like the Hamburger Index are introduced to illustrate the necessity of adjusting prices based on regional economic conditions. Through practical examples and case studies, the chapter offers a comprehensive guide for businesses to implement effective digital pricing models, enhance customer satisfaction, and drive sustainable revenue growth in the competitive digital marketplace.

Pages: 8

This chapter presents a comprehensive guide to implementing value-based pricing and customer retention strategies in SaaS businesses, with a specific focus on Workday. It highlights the importance of understanding product value and leveraging it in subscription models to drive growth. The chapter outlines key metrics such as customer lifetime value (LTV), customer acquisition cost (CAC), average revenue per user (ARPU), and retention rates, which are critical in making pricing decisions. A five-step process is introduced to increase customers’ willingness to pay, including assessing the customer’s initial status, driving product adoption, reassessing value realization, transforming customers into brand ambassadors, and creating benchmarks for attracting new customers. Through practical insights and real-world examples, the chapter emphasizes the need for collaboration between sales, pricing, and product teams to meet and exceed customer expectations, ultimately fostering long-term growth and customer loyalty.

Pages: 9

This chapter explores the evolution of digital advertising with a focus on Google’s DoubleClick platform and the emergence of programmatic ad buying. It explains how DoubleClick revolutionized the advertising landscape by centralizing ad management, introducing metrics and tracking, and enabling dynamic ad serving. The chapter delves into the concept of real-time bidding (RTB), which allows advertisers to bid for ad space in real-time, enhancing ad relevance and conversion rates. By understanding DoubleClick’s pricing models, including CPM, CPC, and CPA, advertisers can optimize their budgets and achieve campaign goals. The chapter also discusses future trends in digital advertising, such as the use of immersive technologies and the shift towards first-party data due to privacy regulations. Through hypothetical scenarios and real-world examples, the chapter illustrates the value proposition of programmatic advertising for both advertisers and publishers.

Pages: 56

No chapter abstract available.

Pages: 14

This chapter provides an in-depth analysis of implementing effective pricing strategies in retail, using Media Markt as a case study. It underscores the importance of a well-defined pricing strategy that considers competition, price positioning, target group, and promotional strategy. The chapter highlights the critical role of proper execution and monitoring in realizing the benefits of a pricing strategy. It outlines the key elements necessary for implementation, including the right software, a dedicated pricing team, and comprehensive monitoring processes. The chapter discusses various pricing approaches such as cost-plus, competitor-based, and value-based pricing, and emphasizes the need for dynamic pricing systems that can handle complex algorithms and data inputs. By focusing on practical implementation steps and the integration of advanced pricing tools, the chapter offers valuable insights for retailers aiming to enhance their competitive edge and profitability.

Pages: 10

This chapter explores the application of value-based pricing at Assa Abloy, emphasizing its importance in maximizing revenue and profitability. Through a detailed narrative, it illustrates the process of conducting value analysis to understand customer perceptions and willingness to pay for new products. The chapter explains the benefits of involving cross-functional teams in workshops to identify value drivers and assign appropriate weights to them. It provides practical steps for scoring products against these value drivers, creating a value map, and using the insights to set optimal prices. The chapter concludes with a case study on adjusting prices and product features to align with customer value, demonstrating the strategic advantages of value-based pricing in enhancing product offerings and capturing maximum value from customers.

Pages: 18

This chapter delves into the integration of artificial intelligence (AI) in pricing strategies at online retail. It highlights the complexities of pricing management and how AI can address these challenges by automating decision-making and optimizing prices based on data-driven insights. The chapter discusses various AI techniques, including machine learning algorithms, used to analyze price elasticity, demand forecasting, and competitive pricing. It emphasizes the role of AI in setting and adjusting prices dynamically to maximize revenue, profit, and market share. The chapter also explores the practical applications of AI in handling large datasets, identifying optimal price points, and balancing multiple business objectives simultaneously. Through detailed examples, it demonstrates how AI enhances pricing accuracy and efficiency, providing a competitive edge in the retail industry.

Pages: 12

This chapter compares pricing strategies in retail and hospitality, focusing on Nike and Hilton. It explores how each company approaches pricing to achieve competitive advantage and profitability. The chapter highlights the differences in pricing dynamics between the two sectors, emphasizing the role of direct-to-consumer influence in airlines and hotels versus strategic cost management in retail. It discusses the integration of technology and AI in pricing, showcasing how real-time data and dynamic pricing tools enhance decision-making. Through case studies and interviews with industry experts, the chapter provides insights into the challenges and successes of pricing in diverse industries, offering practical advice for leveraging pricing strategies to drive growth and profitability in both retail and hospitality sectors.

Pages: 51

No chapter abstract available.

Pages: 8

This chapter examines the implementation of customer value management (CVM) and value-based pricing at Borealis. It highlights the importance of focusing on customer needs and building partnerships rather than merely engaging in transactions. The chapter outlines the four main areas of the CVM framework: value creation, value quantification, value communication, and value capturing. It provides practical examples and best practices for overcoming challenges in each area. The process of quantifying intangible elements of value, such as technical service and brand reliability, is emphasized as crucial for establishing a meaningful conversation with customers. The chapter concludes by discussing how value-based pricing not only ensures fair business relationships but also encourages continuous improvement and profitability. Borealis’ journey with CVM demonstrates how understanding and communicating the value delivered to customers can transform pricing strategies and foster long-term customer relationships.

Pages: 10

This chapter explores the strategic importance of managing price image to influence consumer perception and drive business success, focusing on global brands Bonduelle and Unilever. It defines price image as the consumer’s perception of prices relative to competitors and emphasizes the psychological aspects influencing this perception. The chapter outlines the steps for developing a robust value proposition, understanding target audiences, and aligning pricing strategies with brand promises. Practical examples from Bonduelle and Unilever illustrate how to build a strong price image through quality, innovation, and sustainability commitments. The chapter also discusses emerging trends in pricing, such as dynamic and personalized pricing, and the importance of maintaining price consistency to build trust. By effectively managing price image, brands can enhance perceived value, foster customer loyalty, and achieve long-term profitability.

Pages: 22

This chapter details the implementation of value-based pricing at Coor, a leading provider of facility management services in the Nordics. It addresses the skepticism often associated with value-based pricing and showcases Coor’s successful transition from cost-based to value-based pricing. The chapter explains how Coor empowered its staff by moving pricing decisions closer to the customer, emphasizing the value delivered rather than just costs. It outlines the design phase of the pricing project, which included developing a pricing strategy, structure, and management process. The concept of “Proud Pricing” is introduced, highlighting the importance of employee pride in service delivery. Practical examples, such as the introduction of value-based items and simplified pricing tools, demonstrate how Coor achieved a cultural shift towards value-based pricing. The chapter concludes with lessons learned and the benefits of aligning pricing with customer value to enhance both customer satisfaction and business profitability.

Pages: 9

This chapter focuses on the strategic importance of terms and conditions management at DHL, a global leader in logistics. It explores how well-structured terms and conditions can enhance customer satisfaction, reduce risks, and improve financial performance. The chapter outlines the process of reviewing and updating contract terms to ensure they align with current business objectives and market conditions. Key elements include the standardization of terms, training for sales and contract management teams, and the integration of terms management into the broader pricing strategy. The chapter provides examples of successful implementations that resulted in better customer retention, reduced disputes, and increased profitability. The emphasis is on the continuous review and adaptation of terms to maintain competitive advantage and operational efficiency.

Pages: 55

No chapter abstract available.

Pages: 14

This chapter examines the unique challenges of pricing in the consumer goods industry through the lens of Asahi, a global beverage company. It highlights the complexities of managing pricing across a vast portfolio of products sold in diverse markets and through various channels. The chapter discusses the roles of different organizational functions – marketing, sales, and finance – in developing and executing pricing strategies. It emphasizes the need for a dedicated pricing function that can balance short-term sales targets with long-term brand positioning and profitability goals. The chapter also explores the impact of dynamic pricing, promotional strategies, and value-based pricing on consumer perception and market competitiveness. Through detailed case studies, it demonstrates how strategic pricing decisions can drive growth, enhance customer loyalty, and optimize financial performance.

Pages: 13

This chapter explores the comprehensive pricing transformation at Schneider Electric, a global leader in energy management and automation. It details the company’s journey from a fragmented and reactive pricing approach to a unified and strategic pricing framework. Key success factors include the establishment of a global pricing team, the development of standardized tools and methodologies, and the integration of value-based pricing principles. The chapter highlights the role of executive sponsorship, cross-functional collaboration, and continuous training in driving the transformation. It also discusses the challenges faced, such as managing pricing complexity across multiple business units and regions. The chapter concludes with key takeaways and best practices for sustaining pricing excellence, emphasizing the importance of adaptability, data-driven decision-making, and ongoing innovation in pricing strategies.

Pages: 15

This chapter details the establishment of a structured and professionalized revenue management (RM) function at Lotte Wedel, a Polish confectionary company. Initially facing typical FMCG challenges and utilizing standard pricing methods, Lotte Wedel recognized the need for a more sophisticated RM approach to drive profitability amidst market complexities. The project began with the appointment of an internal revenue manager, emphasizing the importance of in-depth company knowledge and strategic oversight. The process involved four key steps: assessing the status quo, developing a detailed RM blueprint, structuring the RM organization, and preparing for implementation. Key outcomes included sustainable business growth, improved profitability, and enhanced organizational alignment. The chapter highlights the integration of RM processes, dimensions, and granularity, ensuring practical and actionable insights. The strategic placement of RM under the CEO underscored its critical role, while a lean RM structure facilitated efficient resource utilization. The successful implementation, just before the COVID-19 pandemic, enabled Lotte Wedel to navigate market disruptions more effectively than competitors, demonstrating the value of a robust RM function in fostering resilience and long-term growth.

Pages: 11

This chapter explores the fundamentals of economic indicator analysis and its application in developing proactive pricing strategies to maximize profit and minimize loss. It emphasizes the importance of integrating internal analysis with external economic data to anticipate market trends and respond strategically. The chapter categorizes economic indicators into leading, coincident, and lagging types, illustrating their relevance in different stages of the business cycle. A case study from Ahold Delhaize during the COVID-19 pandemic demonstrates the practical implementation of this analysis, using 11 key economic indicators to inform pricing decisions. The chapter advocates for pricing agility and a holistic approach, combining historical data with real-time economic trends to enhance forecasting accuracy. It underscores the necessity of sector-specific analysis, acknowledging that industries respond differently to economic events. By leveraging economic indicators, businesses can transition from reactive to proactive pricing strategies, thereby achieving greater profitability and competitive advantage. The chapter concludes by highlighting the benefits of economic indicator analysis in improving operational efficiency and aligning pricing strategies with broader economic conditions.