2. ARE YOU PRICING LIKE DENNIS DENUTO?
Why Pricing Is Getting Scary?
Why Is Pricing So Important?
Are You Pricing Like Dennis Denuto?
10 Steps to Value-Based Pricing
16. Why is Pricing so important?
Impact on Operating Profit of a 1% improvement in…
2.3%
3.3%
7.8%
11.1%
Fixed Costs Volume Variable Costs Price
17. …regardless of the industry
Impact on Operating Profit of a 1% improvement in Price
22.0%
13.5%
12.7%
12.3%
11.4%
11.1%
10.4%
10.1%
9.8%
9.3%
8.6%
6.8%
6.1%
3.0%
1.8%
Automotive
Transportation
Metals & Mining
Chemicals
High Tech &
Electronics
Aurospace & Defense
Paper
Insurance
Healthcare
Oil & Gas
Communications
Consumer Products
Pharmaceuticals
Banking
Investment
For The Kroger Retail Food
Chain…
► If prices were increased 1%...?
For Coca Cola…
► If prices were reduced 1%...?
For Continental Airlines
► 44mill passengers x Average fare
of $193 = Loss
18. 50.0%
40.0%
32.0%
28.0%
26.0%
18.0%
8.0%
2.0%
Packard Other Compaq HP IBM Gateway Dell Apple
Source: Docters, R et al (2004) Winning the Profit Game: Smarter Branding, Smarter Pricing, McGraw-Hill, p40
The Importance of Price
As the Primary Selection Criteria, by brand – PC Industry
Who’s a fan…
Of this Brand?
19. Words of Pricing wisdom
“…if you have to have a
prayer session before
raising…prices…then
you’ve got a terrible
business”
“Price is what you
pay…value is what you get”
“The single most important
decision in evaluating a
business is pricing power”
20. But what is “Pricing Power”?
“The ability of
you to get the
price you
deserve for
the value you
provide”
43. Number 5
After-Action Reviews
What was
supposed to
happen?
What actually
did happen?
Why was there
a difference?
What can we
learn from this?
AAR
Facts
Opinions