This Presentation is based on "Ditch the discount" Article by Rafi Mohammed published in Harvard business review Jan-Feb 2011 issue

1. Ditch the Discounts

3. If the economy is showing signs of life, the recent unemployment numbers
are encouraging. Your company probably took a serious margin hit during
the recession and now input costs are rising. So here you are, sitting at
your
desk thinking, “Given this market environment, I need to revamp my
pricing strategy…but what should I do?” This slide is to help you price fo
profits
and growth.

4. What’s wrong with discounts?

5. Discounting your established
brands tells the market two
things: your prices were too
high before, and your
products won’t be worth the
price in the future once the
discounts are gone

6. What smart companies do: Adapting The
Price
different customers have different needs and
therefore place different values on a given
product or service

7. When it comes to
adaptive pricing, it’s
tough to beat the airline
and hotel industries

8. What a
Company
should
do?

9. “It’s time to Reprice for
recovery”
But how?

10. Introduce Lower-Priced
Versions
Stadium

11. Use Promotions to Avoid Price
Drops

12. Adapt Products to Maintain
Affordabilitydecrease product size or volume

13. Unbundle Services And Add Extra
Fees

14. Withdraw Recession-Pricing
Tactics
Tide Basic, launched in 2009, cost 20% less than
regular Tide

15. Introduce New Premium
Products

16. Increase the Price of Regular
Products

17. Offer New Ways to Experience
Luxury

18. Some examples
Hyundai let buyers who
lost their jobs return
their vehicles. It thus
avoided further price
cuts—and in nine months,
fewer than 50 vehicles
were returned

19. Some examples
A midweek special in a
restaurant

20. The perceived value of a product as simple as
a black T-shirt depends in part on where it is
Some
Examples

21. Because of its high standards for quality and
continual innovation, PACCAR can charge a
premium for its trucks
Some
Examples

22. Application in Indian Market

23. Telecom Companies
They unbundle their services and then keep extra
charges on each service they provide like tariff plan,
data plan etc.

24. Oil and Soap Companies
They reduce the product volume and thus
reduce manufacturing cost result in higher

25. CLOTH
SHOWROOM
Sometimes they offer one free set of cloth if you buy two
three set

26. News Paper
On a Particular day they offer something special and charge
extra for this-like Hindustan Times ”Sunday Special”

27. Kingfisher(Airline)
They offer new ways to experience luxury
and charge higher than usual for same

28. Cinema
hall
They charge money based on location of place
from where you are watching the movie

29. Indian Railway
Indian Railway offers seasonal ticket for
short distances as a method of “Pricing

30. Subway
Subway offers simple sandwich which costs less
than special sandwich

31. Digital
coupons
Digital coupons such as these,
available at Coupons.com,have grown

32. Coca-Cola
Coca-Cola Believes in Promotional

33. Apple- highly differentiated
product
Apple can increase price of it’s products
based on their excellent quality

34. Music
Band
They decide the price on the basis of how
many and which performer you want to see

35. Summary
After Recession it’s very necessary to Reprice for
recovering growth and profit of the company. This
presentation shows how to price in this situation in Indian
market as well as world market with ditching the discount.
Some common pricing methods are:
 Introduce Lower-Priced Versions
 Use Promotions to Avoid Price Drops
 Adapt Products to Maintain Affordability
 Unbundle Services And Add Extra Fee
 Withdraw Recession-Pricing Tactics
 Introduce New Premium Products
 Increase the Price of Regular Products
 Offer New Ways to Experience Luxury

36. Credit
 KOTLER, P. & KELLER, K. 2011. Marketing
Management 14th Edition,Upper Saddle River,
NJ, Prentice Hall.
 Rafi Mohammed, “Ditch the discounts”,Harvard
Business Review, Jan-Feb, 2011, p. 23-25.
 Eric Mitchell, “How Not to Raise Prices,” Small
Business Reports, November 1990, pp. 64–67.
(With due thanks to the owners of Photographs)