Pricing requirements vary by market and are unique to every organisation. In this webinar we will discuss some of the common pricing models, PTW, Pricing strategy and presenting the Price data in proposals.
Transcript of APMP Foundation Study Group Session 7 - Pricing and Commercial proposal
1. Foundation Certification Study Group Session 6 Proposal
Writingng Study Group Session 7 Proposal Pricingng
2. Proposal Pricing
3. Common Pricing Models Your Logo 01Fixed Price Time &
Materia l Managed Services Outcome based Pricing 02 Payments are
made on an hourly or daily basis and cost of materials used, up to
a not- to-exceed amount. The price is set and fixed by unit of
product or measure. FP contracts impose the maximum risk on the
Contractor and minimum administrative burden on the customer. 03 04
Outcome-driven solutions are pin-pointed and positioned as
delivering specific value to the business. Outcome-based projects
aim to deliver measurable impact on the customers overall business
results. The managed services model offers defined service
deliverables at a fixed cost. In this model the value-add is
quantitatively measured in terms of target Service Level Agreements
(SLAs). This is based on clearly defined parameters in project
performance and quality. Customers are billed at a fixed monthly
cost plus unit cost per additional unit delivered.
4. Price-to-Win 05 04 03 02 01 Find out the clients max/min
price range and min/max capability range and their price-
capability tradeoff window. Understand the price-capability
tradeoff Look for budget information and the funding sources from
different annual reports, public sources and websites Determine the
clients budget and funding profile Find out the clients estimates
by comparing total cost to the total cost of other similar
projects, parametric or bottom up costing Determine the clients
should-cost estimate Determine the costs for different solution
models like marginally compliant, capability-satisfied and
value-driven solutions. Estimate solution cost Establish your PTW
and implement your strategy as per the capture plan Integrate the
solution and PTW
5. Pricing Strategy 1 865432 7 Develop cost bogeys early
Differentiate between Price & Value Define a pricing strategy
aligned with sales strategy Base all cost estimating rationale on
nothing is new assumption Prepare estimation guidelines for each
competition Minimize negotiated price decrements Consider No-Bid if
primary focus of sales is to reduce costs Disclose price in
executive summary unless prohibited
6. Your Presenting Cost and Price Data 02 03 01 05 04 06
Present relative cost comparison in the technical proposal
Substantiate cost or price with past performance data. Explain and
quantify the added value Include Pricing in Executive summary
unless prohibited Present the cost and price data graphically
Prepare a cost volume summary where costs are prohibited in
technical proposal
7. Stay connected with us on Linkedin Study Group for details
of the next webinar on APMP Foundation Mock Test. Thank You.
Abhijit Majumdar CP.APMP Associate Vice President Zensar
Technologies Ltd. Pune. India.