Pricing Strategy for Mid-Market Companies

Pricing Strategy for Mid-Market
Companies

www.ShortTrackCEO.com
www.ShortTrackCEO.com ©2010 ShortTrack CEO

SYSTEM FOCUS

2 www.ShortTrackCEO.com ©2010 ShortTrack CEO

MARKET QUADRANT REQUIRES PLANNING

Foundation Market
• Product / service • Sales force
• Purpose • Marketing strategy
• Culture • Brand strategy
• Competitive
Company positioning
Value

• Profitability • Good skills
• Capacity • Hiring success
• Productivity • Motivation
• Cash flow • Accountability

Operations People


GOAL IS TO INFLUENCE MARKET

F M
Even if your
foundation was viable Are you influencing your
yesterday, will it be market or is your market
viable tomorrow? influencing you?

Do you have the right Does the validated
balance between assessment of your
investing in today and people guarantee you’ll
investing in tomorrow? achieve your public and
private agenda?

O P

PRICING REINFORCES YOUR POSITIONING

• Who buys from you
– Competitive positioning
– Competitive advantage
– Brand strategy
– Distribution strategy
– Pricing strategy


PRICING

• What is your pricing strategy?
– Cost plus?
– Match competition?
– Undercut competition?
– Don’t have one?

• Pricing is one of classic “4Ps”
of marketing
– Product, Price, Place, Promotion


PRICING
• Pricing strategies can be
complex
– Can support or “fight” your brand
and positioning

• Key is to align pricing
strategy with
– Value proposition
– Competitive positioning
– Brand strategy


PRICING

• Alignment creates “harmony”
– Price is final piece of brand puzzle
in most buyers’ minds

• Price creates value
perception
– Grey Goose vs. Smirnoff


PRICING
• Changing pricing is
important
– Parker Hannifin CEO defined its
strategy

• Pricing alignment with
brand strategy
– Product leadership = higher
prices
– Operational excellence = lower
prices
– Customer intimacy = midrange
to higher prices


PRICING
• In B2B, how do
salespeople damage
brands?
– Always lowering prices to “get
the sale”

• Devalues offering unless
value proposition is
operational excellence
– Give other incentives instead of
just lowering price


PRICING
• How does pricing affect
revenue and profits?
– Price sensitivity, or “elasticity”
affects volume

• For non-economists,
shows slope of demand
curve
– Flat means market not
sensitive to price changes
– Vertical means market very
sensitive


PRICING

• What is the easiest way for
most mid-market
companies to increase
profits 5%?

• Raise prices
– Evaluate first
– Should We/Can We™ will reveal
impact

• People involved
– Sr. mgmt/CEO
– Sales and marketing teams
– Finance


PRICING

• What might a pricing audit
reveal?
– Raise some prices
– Keep some same
– Lower some

• Will make right choices if
– Match pricing to strategy and
understand elasticity


PRICING BOARD RESULTS


PRICING

• Add completed reports to strategy binder

• Will use for next module


• Download our eBook for More
– http://www.shorttrackceo.com/mid-market-ceo-ebook/


Pricing Strategy for Mid-Market Companies

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