中欧国际商学院定价策略July192009pricing.pptVIP

Pricing Bayer Chair Professor Willem Burgers Course Outline Foundations Case: Atlantic Computer Thinking Strategically Case: McCaw Embedded Pricing Case: Signode Tools, Tactics, and Tricks: Metrics, Fences, Framing Case: Blockbuster Video Channels and Pricing Case: Shanghai Honggong Mathematics, Case: Jahwah Price Research Price War Case: Kodak Funtime Importance of Pricing What is the Right Price? Customer Value/Willingness to Pay Substitutes/Uniqueness? Switching costs? Easy to compare price? Easy to compare quality? Price/Quality relationship? Significant expenditure? Important end-benefit? Ingredient? Does the buyer pay? Fairness? Inventory? Value? One Barrel of… Coca Cola Milk Evian Water Orange Juice Lemon Oil Scope Mouthwash Jack Daniel Visine Eye Drops $78.83 $126.00 $189.90 $251.16 $390.88 $826.65 $4,133.26 $32,202.24 2. Competition How many sellers? Monopoly – Oligopoly How many buyers? Monopsony - Oligopsony How differentiated is the product? Monopolistic competition 3. Escape the Cost Plus Delusion Cost Based Pricing product – cost – price – value – customers? Value Based Pricing customers – value – price – cost – product? The role of cost in pricing relevant costs, incremental costs, avoidable costs, opportunity costs: Our goal is to maximize gross profit 4. Strategic Objectives Growth? Profit? Survival? Stability Cost? …? Pricing Strategy Alternatives Competition-based Cost-plus Value-in-use Custom based Auction/Liquidation … Business as a Game But there are many games Rule based games (e.g., employment contract) follow the principle that for every action there is a reaction and to play well you must look ahead and reason backward Freewheeling games (e.g., contract negotiation) follow the principle that you can not take away more from the game than you bring to it and to play well you must maximize this value The Players in the Game Customers Competitors Company Complementors Suppliers Parts of the Game 1. Pl