SEMIS MKTG NOV 9

Customer Value

Price positioning relative to competitors across segments.

Mapping Value

Perception of benefits versus buyer willingness to pay.

Price Perceptions

Influence of communication on perceived price levels.

VEL

Value Equivalent Line; perceived price transparency.

Functional Benefits

Physical nature or performance of a product.

Process Benefits

Enhancements to transaction efficiency and ease.

Relationship Benefits

Advantages from mutually beneficial seller-customer relationships.

Zone of Indifference

Price elasticity is effectively zero in this zone.

Dynamic Value Map

Competitor value changes trigger market reactions.

Dynamic Value Management

Managing price/benefit positioning amid market changes.

Repositioning Along the VEL

Simultaneous price and benefit changes with lower risk.

Moving Off the VEL

Requires deeper market understanding and risk assessment.

Estimating Competitor Response

Predicting competitor actions based on past behavior.

Strategic Intent

Strong reactions when core markets are threatened.

Recent Investments

Firms with investments resist backing down.

Range of Options

Competitors' ability to match features or prices.

Level of Threat

Similar products react strongly; distant ones may not.

Market Position

Well-positioned firms react less aggressively.

Financial Health

Strong finances allow for delayed competitive responses.

Maturity

Experienced firms are cautious in their reactions.

Level of Industry Tradition

Competitors follow established patterns in pricing.

Putting Customers on the Value Map

Categorizing customers based on their business value.

Two Common Mistakes

Blank space and cutting off customers.

Value Profiling

Detailed market profile reveals value perception misalignments.

Market Strategy

Broadest level of price management, informed by business strategy.

Cost Change

Triggered by raw material abundance or shortages.

Supply Changes

Caused by new capacity, patents expiring, or closures.

Demand Changes

Market shifts or consumer taste changes affecting demand.

Visibility

Ensuring pricing actions are clear to customers.

Shared Pain

Industry-wide price increases due to profit deterioration.

Low-Cost First Mover

Cost-advantage firms initiate price increases.

Game Change

Companies alter key conditions unilaterally.

Transparent Prices

Prices lack accurate barometers; rely on hearsay.

Transparent Rationale

Clear rationale for price changes prevents misinterpretation.

Common Motivation

Market motivation drives successful price increases.

Organizational Resolve

Long-term commitment needed for pricing strategy success.

Internal Controls

Organization-wide support essential for pricing improvements.

Communication

Ongoing strategy communication builds stakeholder credibility.

Monitoring

Continuous assessment reinforces pricing strategy benefits.

Resellers

Reseller support is crucial in multi-tiered distribution.

Followers

Companies' roles after a market leader's pricing move.

High/Immediate Followership

Quick matching of first mover's pricing strategies.

Low/Slow Followership

Delayed response undermines first mover's pricing impact.

Pricing Infrastructure

Supports pricing excellence across market strategies.

Well-Defined Pricing Process

Clear steps and responsibilities in pricing processes.

High-Caliber Organization Elements

Explicit assignment of pricing roles and responsibilities.

Performance Management Systems

Metrics aligned to reinforce pricing execution.

Pricing System and Tools

Tools for visibility into pricing performance.

Setting and Managing Prices

Establishing and adjusting list prices for offerings.

Establishing Pricing Architecture

Reengineering pricing mechanisms for products/services.

Setting Allowed Terms

Standardizing terms and conditions for pricing.

Managing Special Price Requests

Limiting authority for nonstandard pricing approvals.

Monitoring Pricing Activities

Assessing pricing performance and reporting updates.

Gathering Competitive Intelligence

Collecting data on market pricing trends.

Communicating Pricing

Defining goals and tactics for pricing messages.

Exception Pricing

Special pricing should remain rare, not standard.

Role of Pricing Analysis

Data analysis and communication are key for analysts.

Passive Pricing

Reactive approach to pricing based on needs.

Active Pricing

Proactive improvement and collaboration in pricing.