Marketing And Business Planning

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Marketing And Business Planning

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Marketing And Business Planning

  1. 1. The Price's Perspective Maximum Profit Now Orlando Moreno omoreno@hotmail.com 408.656.2498
  2. 2. Agenda  Introduction  The Pricing Manager’s Goals  What’s Stayed the Same  What’s Changed  Why Things are Tougher Now  The Case for Improved Analytics 2 omoreno@hotmail.com 408.656.2498
  3. 3. The Problem Demand Planning Systems X Supply Planning Systems X Price Planning Decisions not united, not optimized for profit Systems 3 omoreno@hotmail.com 408.656.2498
  4. 4. Why I Am Here  Ran Intel’s MMBP for four years  Not perfect, but pretty good  Personal interest in advancing the art & science of pricing  Therefore became investor in & friend of Rapt  Enjoy discussing the whole pricing process  Even without being able to use Intel’s data 4 omoreno@hotmail.com 408.656.2498
  5. 5. The Pricing Manager’s Goals Maximize profit while meeting the company’s short-term commitments and long-term strategic objectives 5 omoreno@hotmail.com 408.656.2498
  6. 6. “Tools” Have Changed Mostly in Appearance… …and in Complexity 6 omoreno@hotmail.com 408.656.2498
  7. 7. Basic Strategies Remain the Same  Methods  Value  Penetration  Skim  Follower  Cost Different pricing methods available to remain consistent with brand and competitive positioning 7 omoreno@hotmail.com 408.656.2498
  8. 8. As Do Basic Pricing Frustrations “Well, I just talked to customer X, and they said…” Sales VP 8 omoreno@hotmail.com 408.656.2498
  9. 9. However…. Much has changed ...Leaving Less Time To “Get It Right”... 9 omoreno@hotmail.com 408.656.2498
  10. 10. Product Lifecycles Are Getting Shorter ... Sales Time 386 486 Pentium® Pentium II 10 omoreno@hotmail.com 408.656.2498
  11. 11. ...Thereby Pressuring All Marketing Functions  Product management  Communication  Positioning  Line item strategy  Channel relations  Development  And of course...pricing 11 omoreno@hotmail.com 408.656.2498
  12. 12. Dealing with a Globalized Economy As Well Originally, Enter “Dell” and mostly other direct corporate, sellers… mostly US/Europe, mostly While Asia personal explodes as a account producing AND sales consuming region, Then consumer with enormous buyers, thru retail number of small channels dealers All This With Standardized Products and Prices 12 omoreno@hotmail.com 408.656.2498
  13. 13. And Finally…  Product complexity – bundles, “solutions”, configurations  Uncertain demand across boundaries and segment  Factory execution risk given reduced inventories  Increasing earnings pressure  Distributed ownership of the marketing “4 P’s”  More diverse customer expectations and behavior  More complex laws (e.g. antitrust) 13 omoreno@hotmail.com 408.656.2498
  14. 14. What All This Add Means Results? Smarter customers, shorter pipelines Implication? Need for more pricing precision 14 omoreno@hotmail.com 408.656.2498
  15. 15. Meeting the Challenges  Requirements  Good, real-time data  Good processes  Good people  Good tools  Implications  Automate (across the chain)  Optimize (the pricing decision)  Automation will likely NOT be driven by pricing teams 15 omoreno@hotmail.com 408.656.2498
  16. 16. Therefore, for the Pricer… Exquisite Focus on Data and Analysis 16 omoreno@hotmail.com 408.656.2498
  17. 17. Find the Curve Get a quantitative handle on how your markets will Volume respond to price. Be relentless is finding this data Price 17 omoreno@hotmail.com 408.656.2498
  18. 18. Fill the Curve Offer as many products as the factory can deliver V and as the customer can o understand* l u m e *Airline problem Price 18 omoreno@hotmail.com 408.656.2498
  19. 19. Move the Curve Evaluate new products, or product V features, to o l change the u customer’s m e perception of value Price 19 omoreno@hotmail.com 408.656.2498
  20. 20. Getting from Here to There  Technology for data capture is critical  Integrate, automate analytical business processes  Consider experiments with the 4P’s  Take advantage of recent advances in pricing intelligence software 20 omoreno@hotmail.com 408.656.2498
  21. 21. Imperative to Focus on TOOLS  Intelligent pricing software can now  Uncover (then optimize) price / demand relationships  Deal with complex product offerings, lifecycles  Factor in the competition  Connect pricing and supply  Must and can work with people and business processes, but choose… Market math and decision science versus simple arithmetic 21 omoreno@hotmail.com 408.656.2498
  22. 22. There is Upside for Those Who “Get It”  Created Intel’s system integrating supply, demand and pricing  Retained oversight of this for ten years, regardless of his job Uncertainty, rapid change and complexity => a great time to manage pricing 22 omoreno@hotmail.com 408.656.2498
  23. 23. 23 Questions ? Orlando Moreno omoreno@hotmail.com 408.656.2498 omoreno@hotmail.com 408.656.2498

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