Pricing strategies explained by ex-Deloitte and McKinsey Consultants. You can download this Pricing strategies reusable Powerpoint presentation at www.slidebooks.com.

1. Pricing Strategies
Training & Templates
By Ex-Deloitte &
McKinsey
Consultants

2. 22
Aurelien Domont
Slidebooks Consulting
Managing Director
Ex-Deloitte
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3. 33
Agenda
Step 1: Increase your Pricing background knowledge
• Why Pricing is critical?
• Key figures to know
• Key issues caused by ineffective Pricing management
• Root causes of pricing issues
• Estimated benefits of a Pricing management project
• Key consulting firms providing Pricing Management services
• Key questions Senior executives need to answer
Step 2: Define the pricing maturity level of your business
• Create a pricing maturity model
• Identify your current pricing maturity level
• Define your target pricing maturity level
• Design a roadmap to go from your current state to your target state
Step 3: Define your Pricing Strategy
• Set up your Pricing Goal
• Define key methods to reach your Goal and set up your list price
• Apply discount to your list price
Step 4: Make sure you avoid price war
Additional reusable Powerpoint templates

4. 44
Agenda
Step 1: Increase your Pricing background knowledge
• Why Pricing is critical?
• Key figures
• Key issues caused by ineffective Pricing management
• Root causes of pricing issues
• Estimated benefits of a Pricing management project
• Key consulting firms providing Pricing Management services
• Key questions Senior executives need to answer
Step 2: Define the pricing maturity level of your business
• Create a pricing maturity model
• Identify your current pricing maturity level
• Define your target pricing maturity level
• Design a roadmap to go from your current state to your target state
Step 3: Define your Pricing Strategy
• Set up your Pricing Goal
• Define key methods to reach your Goal and set up your list price
• Apply discount to your list price
Step 4: Make sure you avoid price war
Additional reusable Powerpoint templates

5. 55
Price is the fundamental interaction point between supply and
demand
PriceSupply Demand

6. 66
You can receive our reusable Powerpoint slides by submitting your
email at www.slidebooks.com and sharing this presentation
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Aurelien Domont
Slidebooks Consulting
Managing Director
Ex-Deloitte

7. 77
Price impacts both Demand and Supply
Quantity
Price

8. 88
Key figures
3%
Companies effectively
managing, communicating,
and enforcing prices today
300%
Average ROI of a 3 to 6 months
pricing management project carried
out by a tier-one consulting firm
Source: Kiewell and Roegner

9. 99
Ineffective pricing management will cause many issues
Source: Kiewell and Roegner
 Increased service costs
 Increased price
administration costs
 Increased receivables
write-offs
 Wide price bands
 Inaccurate quotations
from field sales
 Slow response to RFPs
 Declining margins
 Little correlation between
volume and price
 Product profitability lack of
visibility
 Lost market share
 Excess / obsolete inventory
 Low volume for new
products

10. 1010
There are key common root causes of pricing issues
Source: Kiewell and Roegner
Lack of new
technology
Inconsistent or
inaccurate
data
No clear
owner of price
& margin
Price
complexity
Lack of Senior
Project
sponsor
Pricing issues

11. 1111
A listing price can be break down in multiple components
List
Price
Rebates
Damaged
Product
Returns
Segment
Discount
Customer
Specific
Inventory
Unbilled
Freight
Payment
Terms
Order Size
Discount
Co-Op
Advertising
Trade
Promotions
Fixtures
& Racks
Pocket
Price

12. 1212
A listing price can be break down in multiple components
List
Price
Rebates
Damaged
Product
Returns
Segment
Discount
Customer
Specific
Inventory
Unbilled
Freight
Payment
Terms
Order Size
Discount
Co-Op
Advertising
Trade
Promotions
Fixtures
& Racks
Pocket
Price
Each component represents
an opportunity to improve
margin

13. 1313
Reusable Powerpoint template
List
Price
Pocket
Price

14. 1414
You can receive our reusable Powerpoint slides by submitting your
email at www.slidebooks.com and sharing this presentation
www.slidebooks.com
Aurelien Domont
Slidebooks Consulting
Managing Director
Ex-Deloitte

15. 1515
Estimated benefits of a Pricing management project
Example
# Opportunity Total Book of
Business
Opportunity ($M)
2018 Margin Opportunity
($M)
Ease of
Implementation
Low High
1 Adjust price based on demand $8 - 10 0.5 1
2
Create a new system providing more
comprehensive pricing data
$1 0.2 0.4
3 Reduce the amount of uncharged freight $1 – 2 0.1 0.2
4 Adjust price based on customer segment $1 - 2 0.1 0.3
5
Tighten price discipline on non-strategic
customer
$8 0.5 1
Total $18 - 22 1.4 2
Easiest HardestEase of implementation:
Illustration

16. 1616
Estimated benefits of a Pricing management project
Template
# Opportunity Total Book of
Business
Opportunity ($M)
2018 Margin Opportunity
($M)
Ease of
Implementation
Low High
1 Insert your own text
2 Insert your own text
3 Insert your own text
4 Insert your own text
5 Insert your own text
Total

17. 1717
A dozen Consulting Firms provide Pricing Management
services
Advise Implement Operate
McKinsey
Bain
BCG
Infosys
Accenture
IBM
Capgemini
BearingPoint
Deloitte Consulting / Monitor
PWC
Ernst & Young
Simon Kucher & Partners
Software vendor, i.e. SAP

18. 1818
In his latest white paper, BCG identified 3 key questions
Senior executives need to answer
In best-practice companies, senior management chairs a pricing
committee accountable for defining and managing the pricing policy,
with a focus on the tradeoff between margin and volume. It includes all
key functions, including sales, marketing, finance, sourcing, and
operations, and meets at least monthly.
Do you have a pricing
governance body at the top
of each division of the
company?
Best-practice companies effectively consolidate the information, derive
the implications, and “operationalize” them into price changes.
Does a pricing team
prepare the data needed
for decision making by the
committee?
Best-practice companies capitalize on and codify customer knowledge so
they can price more astutely. An understanding of what customers value
most, how their economics work, and how they will respond to price
changes can be developed through advanced customer-exploration
techniques.
Do you know more than
your competitors about
your customers’ response
to pricing?

19. 1919
Agenda
Step 1: Increase your Pricing background knowledge
• Why Pricing is critical?
• Key figures
• Key issues caused by ineffective Pricing management
• Root causes of pricing issues
• Estimated benefits of a Pricing management project
• Key consulting firms providing Pricing Management services
• Key questions Senior executives need to answer
Step 2: Define the pricing maturity level of your business
• Create a pricing maturity model
• Identify your current pricing maturity level
• Define your target pricing maturity level
• Design a roadmap to go from your current state to your target state
Step 3: Define your Pricing Strategy
• Set up your Pricing Goal
• Define key methods to reach your Goal and set up your list price
• Apply discount to your list price
Step 4: Make sure you avoid price war
Additional reusable Powerpoint templates

20. 2020
Create a simple Pricing maturity model
Basic
Standard
Advanced
Leading
1Level 2 3 4
Percentage of
Companies
20% 70% 10% <1%
Description
• Cost-plus or margin-
based pricing
• No pricing market
analysis
• No pricing competitive
analysis
• Barely any pricing data
• No resources
exclusively allocated to
pricing management
• No forward-thinking
pricing strategy
• Prices respond to key
market factors or
inventory-driven lifecycle
• Limited pricing market
analysis
• Limited pricing
competitive analysis
• Limited pricing data
• A small dedicated team
allocated to pricing
management
• Limited forward-thinking
pricing strategy
• Context-driven and
managed life-cycle
pricing
• Robust pricing market
analysis
• Robust pricing
competitive analysis
• Comprehensive pricing
data
• A dedicated team
allocated to pricing
management
• Good forward-thinking
pricing strategy
• Pricing based on
predicted demand
• Heavy pricing analytics
coupled with clear
execution accountability
• Sophisticated pricing
strategy involving
multiple internal and
external factors with a
desire to test and learn
• Anticipation of
competitors reaction
• Excellent forward-
thinking pricing strategy
Example of a Pricing maturity model

21. 2121
You can receive our reusable Powerpoint slides by submitting your
email at www.slidebooks.com and sharing this presentation
www.slidebooks.com
Aurelien Domont
Slidebooks Consulting
Managing Director
Ex-Deloitte

22. 2222
Identify your current pricing maturity level
Basic
Standard
Advanced
Leading
1Level 2 3 4
Percentage of
Companies
20% 70% 10% <1%
Description
• Cost-plus or margin-
based pricing
• No pricing market
analysis
• No pricing competitive
analysis
• Barely any pricing data
• No resources
exclusively allocated to
pricing management
• No forward-thinking
pricing strategy
• Prices respond to key
market factors or
inventory-driven lifecycle
• Limited pricing market
analysis
• Limited pricing
competitive analysis
• Limited pricing data
• A small dedicated team
allocated to pricing
management
• Limited forward-thinking
pricing strategy
• Context-driven and
managed life-cycle
pricing
• Robust pricing market
analysis
• Robust pricing
competitive analysis
• Comprehensive pricing
data
• A dedicated team
allocated to pricing
management
• Good forward-thinking
pricing strategy
• Pricing based on
predicted demand
• Heavy pricing analytics
coupled with clear
execution accountability
• Sophisticated pricing
strategy involving
multiple internal and
external factors with a
desire to test and learn
• Anticipation of
competitors reaction
• Excellent forward-
thinking pricing strategy
Current pricing maturity level

23. 2323
Identify your target pricing maturity level
Basic
Standard
Advanced
Leading
1Level 2 3 4
Percentage of
Companies
20% 70% 10% <1%
Description
• Cost-plus or margin-
based pricing
• No pricing market
analysis
• No pricing competitive
analysis
• Barely any pricing data
• No resources
exclusively allocated to
pricing management
• No forward-thinking
pricing strategy
• Prices respond to key
market factors or
inventory-driven lifecycle
• Limited pricing market
analysis
• Limited pricing
competitive analysis
• Limited pricing data
• A small dedicated team
allocated to pricing
management
• Limited forward-thinking
pricing strategy
• Context-driven and
managed life-cycle
pricing
• Robust pricing market
analysis
• Robust pricing
competitive analysis
• Comprehensive pricing
data
• A dedicated team
allocated to pricing
management
• Good forward-thinking
pricing strategy
• Pricing based on
predicted demand
• Heavy pricing analytics
coupled with clear
execution accountability
• Sophisticated pricing
strategy involving
multiple internal and
external factors with a
desire to test and learn
• Anticipation of
competitors reaction
• Excellent forward-
thinking pricing strategy
Target pricing maturity level

24. 2424
Reusable Powerpoint template
Basic
Standard
Advanced
Leading
1Level 2 3 4
Percentage of
Companies
X% x% x% x%
Description
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25. 2525
Identify a roadmap to go from your current state to you target
state
Create a small dedicated team
allocated to pricing
management
Identify the key internal pricing
issues and root causes
Set an IT system
providing heavy pricing
analytics
Create a robust pricing market
analysis
Define the pricing strategy for
the year ahead
January
Dec
Example of high level roadmap

26. 2626

27. 2727
You can receive our reusable Powerpoint slides by submitting your
email at www.slidebooks.com and sharing this presentation
www.slidebooks.com
Aurelien Domont
Slidebooks Consulting
Managing Director
Ex-Deloitte