This document provides an agenda for a presentation on pricing products and services for profitability. The presentation covers fundamentals of pricing and profitability, factors that influence buying decisions, different business models, pricing tactics, and pricing psychology. It includes examples and case studies. The speaker, Akira Hirai of Cayenne Consulting, will discuss tools and strategies for setting optimal prices to maximize profits.
At the microeconomic level:Food, groceries, gasolineAt the macroeconomic level:- Services (housekeeping, accounting, etc.), gasoline
Luxury goods (although demand DID fall when we had the recession)Alcohol and tobaccoPharmaceuticals
Could Old Navy manufacture the jeans on the left? Probably. But could they sell it for $341? Probably not.
In some markets (like commodities) this is the only thing that matters. But in most markets, many other factors play a role.Associated Benefits: Frequent Flyer Points, Percentage of Proceeds to Disaster Relief, Cash Back programs, Loyalty / punch ards, etc. Brand / Prestige / Exclusivity: Tiffany, Chanel handbag, True Religion Jeans, Mercedes, RolexEnvironment: Music, scents, lighting, product placement, helpful staff, exclusive location: Apple Store, Lego Store, high-end spa, Scottsdale Fashion SquarePackaging: Generic vs. Brand Name; Choice & Loyalty: If you offer your customers
In some markets (like commodities) this is the only thing that matters. But in most markets, many other factors play a role.Associated Benefits: Frequent Flyer Points, Percentage of Proceeds to Disaster Relief, Cash Back programs, Loyalty / punch ards, etc. Brand / Prestige / Exclusivity: Tiffany, Chanel handbag, True Religion Jeans, Mercedes, RolexEnvironment: Music, scents, lighting, product placement, helpful staff, exclusive location: Apple Store, Lego Store, high-end spa, Scottsdale Fashion SquarePackaging: Generic vs. Brand Name; Choice & Loyalty: If you offer your customers
There are many moving parts and interactionsChanging the value proposition will allow you to compete at a different price point, but it will also change your fixed and variable cost structure – you need to evaluate both to determine the impact on profitability
Go price shopping – see what your competitors are offering and charging