Differential Pricing - Multex.Com Presented by Group 3

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Differential Pricing - Multex.Com Presented by Group 3

  1. 1. Differential Pricing - Multex.Com Presented by Group 3 Ashish Khamar David Kleinman Ken Song Dallas Thornton Marck Vaisman
  2. 2. Overview of Multex.com <ul><li>Electronic data service provider </li></ul><ul><ul><li>Providing financial information </li></ul></ul><ul><li>“ Multex Investor” service </li></ul><ul><ul><li>A part of Multex’s services for individual investors </li></ul></ul><ul><ul><li>Information services related to stocks, funds, and personal finance </li></ul></ul><ul><ul><li>Investment research reports available through Multex Investor </li></ul></ul><ul><ul><ul><li>Investment banks </li></ul></ul></ul><ul><ul><ul><li>Brokerage firms </li></ul></ul></ul><ul><ul><ul><li>Third-party research providers (e.g., Multex.com) </li></ul></ul></ul>
  3. 3. Overview of Multex.com (Con’t.) <ul><li>Current pricing structure </li></ul><ul><ul><li>Some free reports </li></ul></ul><ul><ul><li>Others are priced by Multex.com </li></ul></ul><ul><li>Pricing structure should be: </li></ul><ul><ul><li>Based on the consumer’s demand </li></ul></ul><ul><ul><li>Consumer’s appreciation for the information </li></ul></ul><ul><ul><ul><li>Not based on the marginal cost </li></ul></ul></ul><ul><li>Two options to consider: </li></ul><ul><ul><li>Bundling </li></ul></ul><ul><ul><li>Versioning </li></ul></ul>
  4. 4. Bundling <ul><li>Bundling: </li></ul><ul><ul><li>Offering a package of services at one fixed price </li></ul></ul><ul><li>Current Mutex’s pricing: </li></ul><ul><ul><li>No bundled services </li></ul></ul><ul><ul><li>Pay-per-view approach to pricing </li></ul></ul>
  5. 5. Bundling (Con’t.) <ul><li>New pricing Strategy: </li></ul><ul><ul><li>Bundling various information at one rate </li></ul></ul><ul><ul><ul><li>Demands for individual financial information goods is variable based on… </li></ul></ul></ul><ul><ul><ul><ul><li>Current market and industry trends </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Customers’ different valuation based on the trends </li></ul></ul></ul></ul><ul><ul><ul><li>Negotiate pricing with its information suppliers </li></ul></ul></ul><ul><ul><ul><li>Set the price at a profitable level </li></ul></ul></ul><ul><ul><ul><ul><li>Analyzing previous customer utilization of the information </li></ul></ul></ul></ul>
  6. 6. Bundling (Con’t.) <ul><li>Bundling Example for Multex Investor </li></ul><ul><ul><li>Values of customer “A” </li></ul></ul><ul><ul><ul><li>Telecomm industry research report: $20 </li></ul></ul></ul><ul><ul><ul><li>Company information of AT&T and MCI: $10 for each </li></ul></ul></ul><ul><ul><li>Values of customer “B” </li></ul></ul><ul><ul><ul><li>Telecomm industry research report: $10 </li></ul></ul></ul><ul><ul><ul><li>Company information of AT&T and MCI: $20 for each </li></ul></ul></ul><ul><ul><li>Revenue: </li></ul></ul><ul><ul><ul><li>Sell them separately, </li></ul></ul></ul><ul><ul><ul><ul><li>Maximum pricing for each report: $10 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Total revenue: $60 </li></ul></ul></ul></ul><ul><ul><ul><li>Bundling the data into one package </li></ul></ul></ul><ul><ul><ul><ul><li>Pricing it at $40 for a package </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Total revenue: $80 </li></ul></ul></ul></ul>
  7. 7. Bundling (Con’t.) <ul><li>Bundling Pricing Options: </li></ul><ul><ul><li>Bundle financial data of different categories (e.g. industry and company) into one price. </li></ul></ul><ul><ul><li>Bundle access to the entire data set and price based on usage (e.g. articles per month) </li></ul></ul><ul><ul><li>Maintain the individual-article based pricing availability </li></ul></ul><ul><ul><ul><li>In order to maintain the customer base of investors </li></ul></ul></ul><ul><ul><ul><li>While pushing frequent users to a bundled plan </li></ul></ul></ul><ul><ul><ul><ul><li>Eventually, this individual-information-based pricing can be phased out </li></ul></ul></ul></ul>
  8. 8. Versioning <ul><li>Versioning: </li></ul><ul><ul><li>Various customers’ appreciations for the same information </li></ul></ul><ul><ul><li>Capitalize on each customer’s individual demand </li></ul></ul><ul><li>Time-based versioning </li></ul><ul><ul><li>Degradation of perceived value of information over time </li></ul></ul><ul><ul><li>Information could be priced on a degrading time scale </li></ul></ul>
  9. 9. Versioning (Con’t.) <ul><li>Versioning Example for Multex Investor </li></ul><ul><ul><li>Price a report at $50 for the first week, $40 the next week, $30, $20, and so on until it reaches a terminal level </li></ul></ul><ul><ul><li>Let the individual customer can decide when to purchase the information </li></ul></ul><ul><ul><ul><li>Customer “A” values the information at $50 </li></ul></ul></ul><ul><ul><ul><ul><li>He will likely buy in the first week </li></ul></ul></ul></ul><ul><ul><ul><li>Customer “B” values it at $40 </li></ul></ul></ul><ul><ul><ul><ul><li>He will likely wait until the price reaches that point </li></ul></ul></ul></ul>
  10. 10. Questions??

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