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iPOTT starting with product pricing

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Product Pricing is a very sensitive area in Product management as it directly impacts on the way a product is positioned in market. It is necessary to answer a few basic questions before proceeding …

Product Pricing is a very sensitive area in Product management as it directly impacts on the way a product is positioned in market. It is necessary to answer a few basic questions before proceeding with this step.

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  • 1. iPOTT 16-Feb-12 Getting you there… Starting with Product PricingGo Goal Product Pricing is a very sensitive area in Product management as it directly impacts on the way a product is positioned in market. It is necessary to answer a few basicSet, Get, Go… questions before proceeding with this step. What technology has been used? Is the product trendy enough? Is that softwareTo visit this blog Click here. compatible with most of the systems that are now being used in Organizations? What expenses were incurred whileiPOTT being an end to end developing it? Based on these criteria, is this product premiumprovider of innovative and cost or affordable?effective services in the areas ofknowledge management, sales A few product companies believe in identifying a targetenablement and consulting offers market and developing a product to address their needs. Aa unique and unbiased platform few others believe in developing a product and then lookingfor software product companies for potential buyers in market. The approach varies and thisworldwide to reach their target adds to the difference in the way product is priced.markets Further, many entrepreneurs carry a wrong notion that anything that involves software development targeting a www.ipott.com client is related to “Product development”. In order to info@ipott.com appreciate the pricing methods, there is a need to differentiate between Software Product and Service. Assume a software company has a client who is looking at automating a certain portion of Research and Development unit to ensure that there is restricted access to services and limited human intervention, then the software that is developed is highly specialized and targeted at delivering a specific need for specific client. This is a Service. It is not 100% reproducible. A Software Product on the other hand is something that can be sold as a unit to ‘n’ number of customers in a homogeneous market. To arrive at the characteristics of 1|P a g e DN: 013/GG/2012 V1.0 Copyright © 2012 iPOTT
  • 2. iPOTT Getting you there… potential buyer of course, market segmentation is required to create homogeneous sets of buyers based on their buying trends and need. The product can be tailored to suit the needsGo Goal of individual homogeneous markets identified.Set, Get, Go… For instance, Norton AntiVirus tool can be targeted at any user who owns a PC or any Company or startup that ownsTo visit this blog Click here. computers. Similarly, Finacle is a Banking Software from Infosys targeting global banks. The idea is that Product isWe have blogs targeting a range of holistic, and Service is not necessarily holistic.audience starting from potentialproduct innovators to CEOs Pricing methods adopted could be at the time of developing a product or direct pricing, while creating special categories orAudience interested in knowing indirect pricing, custom pricing and discount pricing targetingabout Marketing Strategy, Indian a particular group or members, etc.IT trends and Best Practices to beadopted while kick-starting A few software companies believe in price differentiationcompany can utilize the where the same product or identical service is sold at differentinformation provided in these prices in different markets. In other words this creates priceblogs discrimination. This is used in Software-as-a-service model as they charge more for those who use the software frequently.Technology Trends The idea is that if software cannot be ‘resold’, then the premium clients can be charged more than the otherCEO Speak customers who rarely use the software. Such an activity is highly visible in Monopolistic and Oligopolistic markets. www.ipott.com info@ipott.com 2|P a g e DN: 013/GG/2012 V1.0 Copyright © 2012 iPOTT