The Science of StartSession 5: Pricing strategies

paulshawsmithscientific business strategy

paulshawsmithscientific business strategy

What do you need tolearn before the

next session??

paulshawsmithscientific business strategy

1What is the best price for your product offering?

Determining pricing methods ?

****

In groups of 3 – 4 brainstorm times:

Share with your team members:

What method you used to determine your pricing

Give a name to each method

Create a list of different methods

* Time: 10 minutes

* Pick one person to read your methods to the class

Debriefing questions

What is the perceived value of the product?

What is the perceived value of different features?

What does the product cost?

What do different features cost?

What is the customers budget?

How much money does the customer have?

How unique is the product or service?

What is the customer ROI?

paulshawsmithscientific business strategy

Cost pricing 1

Cost pricing

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SkimPricing 2

Skim pricing

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Loss leader3

Loss leader pricing

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Market-orientedpricing 4

What are the competitors charging?

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Penetration Pricing5

Penetration pricing

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Premium Pricing6

Premium pricing

Premium pricing

90,000 is that tractors price if it is only equivalent to competitors tractor

7,000 is price premium for Caterpillar’s superior durability 6,000 is the price premium for Caterpillar’s superior

reliability 5,000 is the price premium for Caterpillar’s superior

service 2,000 is the price premium for caterpillars longer

warranty on parts 110,000 is the normal price to cover Caterpillar’s superior

value -10,000 discount -------------100,000 final price

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Contribution Margin-based Pricing7

Contribution margin based pricing

Price

Profit

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Pay what you want8

Radiohead “pay want you want”

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Freedium9

Freeduim – Upgrade model

Freeduim – Advertising model

paulshawsmithscientific business strategy

? What pricing strategy will you use?