Jan 16, 2012: Mark Stiving, Ph.D., Discusses Value-based Pricing Strategies @markstiving

Transcript from Jan 16, 2012: Global Product Management Talk
Mark Stiving @markstiving Ph.D., Pricing expert, Speaker, and Author
Value-based Pricing Strategies
MAIL: http://bit.ly/ouZN8J FB:http://on.fb.me/ncKUD8 Site: http://bit.ly/dESAcb Hear: http://bit.ly/nbw9Yr

Mark Stiving, Ph.D.,
Pricing expert, Speaker,
and Author, spoke at the Mark says: “I love pricing and really
weekly Global Product enjoy helping people understand it
better. The Global Product
Management Talk on Management Talk represents a
Twitter Monday, January large community of product people
16, 2012 using the who really need to know pricing and
hashtag #prodmgmttalk it excites me knowing I have the
potential to help so many
professionals at once. "
INTRO
All businesses, no matter their size, strive to create value. Pricing captures the true
measure of a company’s worth. Pricing is the least understood, incredibly powerful, yet
most underutilized marketing lever. Companies spend most of their time creating real
value for their customers, but very little time figuring out how to capture as much of that
value as possible. This elusive link profoundly impacts the success or failure of every business. This talk will help
the participants recognize how to grow revenue and profits through pricing. The goal of the discussion is to
enable participants to determine how to use pricing to capture more value, and even decide what new products
to develop to capture the most value.

Each week, The Global Product Management Talk features an expert guest speaker who asks questions of
the participants on Twitter in a Socratic discussion. The speaker and co-hosts broadcast their comments
over BlogTalkRadio. The transcript of Tweets and podcast are available after the live event.

 Podcast: http://bit.ly/sJpGF5
 Links: http://bit.ly/xSp9FL

QUESTIONS FOR DISCUSSION
Q1 How do potential customers use price when deciding on which product to buy?
Q2 How do I get my sales force to not give in on price so easily?
Q3 Is pricing services different than pricing products?
Q4 Is it fair to charge different people different prices? If so, when?
Q5 How do I make money with free?
Q6 How do I compete with free?
Q7 Should I end my prices with 99?
Q8 How do I raise prices?
Q9 What if my competitor lowers price?

TWEET CHRONOLOGY
Join Global Product Management Talk! http://linkd.in/jRmwRx
Never participated in a twitter chat? FAQs http://t.co/Qr2s1o0O

_______________________________________________________________________________________________
Sponsor us http://bit.ly/gF0Tt3

Create a Radio Show and Reach Millions. Free for 30 days. Start now. http://bit.ly/A2E6LD Thank you.

@prodmgmttalk #prodmgmttalk http://www.prodmgmttalk.com/ 1


Learn How to participate in Socratic Twitter Talk via Global Prod Mgmt Talk http://t.co/nV2DZflo
Learn about Tweeting Best Practices and Twitter Talk FAQs http://t.co/8WzU7LSf

ProdMgmtTalk #prodmgmt Today we're starting an hour later & Will award @markstiving book to lucky
participanthttp://t.co/b6wcmhvB #prodmgmttalk -4:05 PM Jan 16th, 2012

ProdMgmtTalk Roger is co-host today! @rcauvin on Value-Based vs Cost-Based Pricing (blog
archives) http://t.co/cI9p2rE9#prodmgmt #prodmgmttalk -4:12 PM Jan 16th, 2012

ProdMgmtTalk @johnpeltier hope you're done w/dinner to join us to discuss pricing w/ @rcauvin & @markstiving in 45
minutes!#prodmgmt #prodmgmttalk -4:16 PM Jan 16th, 2012

ProdMgmtTalk Impact of Pricing On Value w/ @markstiving@rcauvin @cindyfsolomon Join us in 40
minutes!http://t.co/bx6cAs6T #prodmgmt #prodmgmttalk -4:21 PM Jan 16th, 2012

ProdMgmtTalk Today's speaker @markstiving pricing expert w/ Ph.D. in Marketing (Pricing) from U.C.
Berkeley #prodmgmthttp://t.co/bx6cAs6T #prodmgmttalk -4:23 PM Jan 16th, 2012

ProdMgmtTalk Our speaker @markstiving >15 years helping companies implement value-based pricing strategies to
increase profits #prodmgmt #prodmgmttalk -4:24 PM Jan 16th, 2012

ProdMgmtTalk Make your phone smarter: there's #Android app for Global Product Management
Talk! #prodmgmthttp://t.co/4owvOjDz #pm #prodmgmttalk -4:25 PM Jan 16th, 2012

ProdMgmtTalk We'll be live on air in 1/2 hour - listen for first 15 minutes http://t.co/viPAUhHI
#BlogTalkRadio #prodmgmt #prodmgmttalk -4:31 PM Jan 16th, 2012

ProdMgmtTalk @VFigatelix @Lrmarval Join us to discuss pricing w/ @markstiving & @rcauvin in 1/2
hour http://t.co/b6wcmhvB #prodmgmttalk #prodmgmt -4:32 PM Jan 16th, 2012

ProdMgmtTalk @aussiegoldy Join us to discuss pricing w/@markstiving & @rcauvin in 1/2 hour http://t.co/b6wcmhvB
#prodmgmttalk #prodmgmt -4:32 PM Jan 16th, 2012

ProdMgmtTalk Join us to win "Impact Pricing: Your Blueprint for Driving Profits" at today's
discussion #prodmgmthttp://t.co/b6wcmhvB #prodmgmttalk -4:38 PM Jan 16th, 2012

ProdMgmtTalk Follow Global Product Management Talk On BlogTalkRadio! http://t.co/rgVn1HbN to get weekly
reminders#prodmgmt #prodmgmttalk -4:44 PM Jan 16th, 2012

rcauvin A mere thirteen minutes until #prodmgmttalk begins, co-hosted by yours truly & @cindyfsolomon &
featuring @markstivingon pricing. #prodmgmt -4:47 PM Jan 16th, 2012

MarkStiving We are so close to starting. I'm getting exciting.#prodmgmttalk -4:52 PM Jan 16th, 2012

ProdMgmtTalk Warren Buffet "most important thing to view is "pricing power" when choosing companies to invest
in"#prodmgmttalk -4:56 PM Jan 16th, 2012

_______________________________________________________________________________________________




MarketingMel RT @rcauvin #prodmgmttalk begins at 8 ET, co-hosted by yours truly & @cindyfsolomon &
featuring @markstivingon pricing #prodmgmt -4:58 PM Jan 16th, 2012

ProdMgmtTalk Welcome @MarketingMel ! Please introduce yourself & where you're tweeting from #prodmgmttalk -
5:00 PM Jan 16th, 2012

MarkStiving Hi all, I'm sitting in San Jose, CA. #prodmgmttalk -5:00 PM Jan 16th, 2012

ValWorkman #prodmgmttalk Hi,looking forward to the thoughts -5:01 PM Jan 16th, 2012

MarketingMel Hi Career communications pro visiting from the beautiful mountains of Tennessee #prodmgmttalk Pls.
Tweet url for radio link TY! -5:01 PM Jan 16th, 2012

MarketingMel @ValWorkman Hi enjoyed your talk last week. Heard your podcast. #prodmgmttalk -5:03 PM Jan 16th, 2012

M3_Boost Hi all, listening in from Western Australia. #prodmgmttalk-5:03 PM Jan 16th, 2012

ProdMgmtTalk Welcome @ValWorkman @M3_Boost Info about today's talk http://t.co/b6wcmhvB #prodmgmttalk -5:04
PM Jan 16th, 2012

ValWorkman #prodmgmttalk Value based pricing. Hard to believe its real. -5:04 PM Jan 16th, 2012

lisaw1 Hello everyone! I'm in Mill Valley, CA. It's been awhile:) Thanks for hosting,
Cindy! #prodmgmttalk #prodmgmttalk -5:04 PM Jan 16th, 2012

ErikaLAndersen Hi all from Salt Lake City! Topic questions on Pricing look very
interesting. http://t.co/79PnmW40 #prodmgmttalk -5:05 PM Jan 16th, 2012

rcauvin Hi, I'm Roger L. Cauvin, a product manager in Austin, Texas. Talking value-based pricing
w/ @markstiving.#prodmgmttalk #prodmgmt -5:05 PM Jan 16th, 2012

ProdMgmtTalk Welcome @lisaw1 ! #prodmgmttalk -5:05 PM Jan 16th, 2012

ValWorkman #prodmgmttalk Doesn't value depend on perspectives, which isn't fixed. -5:05 PM Jan 16th, 2012

ProdMgmtTalk This is your co-host @cindyfsolomon tweeting from SF Bay Area today - Delighted to be here & happy
MLK, Jr. day#prodmgmttalk -5:06 PM Jan 16th, 2012

ProdMgmtTalk Welcome @ErikaLAndersen glad to see you again#prodmgmttalk -5:06 PM Jan 16th, 2012

rcauvin Pricing a product is like giving a grade to your own assignment. @markstiving #prodmgmttalk #prodmgmt -5:06
PM Jan 16th, 2012

ProdMgmtTalk Pricing a product is like giving a grade to your own school assignment
says @markstiving #prodmgmttalk -5:07 PM Jan 16th, 2012

ProdMgmtTalk @markstiving says "there are 3 most important topics re: pricing. 1. as a person setting price - you're
charging for value" #prodmgmttalk -5:08 PM Jan 16th, 2012

MarketingMel RT @ProdMgmtTalk: Pricing a product is like giving a grade to your own school assignment
says @markstiving#prodmgmttalk -5:08 PM Jan 16th, 2012

ProdMgmtTalk @markstiving says value-based pricing maximizes profit #prodmgmttalk -5:08 PM Jan 16th, 2012
_______________________________________________________________________________________________




ValWorkman #prodmgmttalk But giving a grade to a moving perception is a little harder. -5:08 PM Jan 16th, 2012

ProdMgmtTalk @markstiving 2. price segmentation - how to charge dif customers dif prices (is it fair? Under what
circumstances)#prodmgmttalk -5:08 PM Jan 16th, 2012

MarketingMel Always use value based pricing not cost plus pricing.#prodmgmttalk -5:09 PM Jan 16th, 2012

ProdMgmtTalk @markstiving 3. portfolio pricing - must price for good, better, best (give discounts on some to gain
sales on others) #prodmgmttalk -5:09 PM Jan 16th, 2012

rcauvin Most important pricing issues: value- vs cost-based pricing, charge diff customers diff prices, portfolio
pricing.#prodmgmttalk #prodmgmt -5:09 PM Jan 16th, 2012

ProdMgmtTalk To @valworkman "value is how much your customer is willing to pay for product" "single customer
makes 2 decisions...#prodmgmttalk -5:10 PM Jan 16th, 2012

ProdMgmtTalk To @valworkman 1. Will I? (can I afford) 2. Which 1 (shall I buy) value depends on next best alternative
$ & feature differe #prodmgmttalk -5:10 PM Jan 16th, 2012

ValWorkman #prodmgmttalk But don't we also have to consider our relative cost-position as well when deciding
price? -5:11 PM Jan 16th, 2012

DrMEKelly_DUQU RT @ProdMgmtTalk: Pricing a product is like giving a grade to your own school assignment
says @markstiving#prodmgmttalk -5:12 PM Jan 16th, 2012

M3_Boost One of the challenges is communicating the value that the sellers feels is in their product to the
customer #prodmgmttalk-5:12 PM Jan 16th, 2012

rcauvin RT @ValWorkman: #prodmgmttalk But don't we also have to consider our relative cost-position as well when
deciding price?#prodmgmt -5:12 PM Jan 16th, 2012

ErikaLAndersen Difference in features or difference in experience? Or is there a difference? #prodmgmttalk -5:12 PM Jan
16th, 2012

ProdMgmtTalk @markstiving says "in general costs don't matter (controversial) to the price" Fixed costs never matter
to what price to charg #prodmgmttalk -5:13 PM Jan 16th, 2012

MarketingMel I was quoting @markstiving on @ProdMgmtTalk I agree w/ him! about value based pricing esp. in
service!#prodmgmttalk -5:13 PM Jan 16th, 2012

ProdMgmtTalk Welcome @DrMEKelly_DUQU #prodmgmttalk -5:14 PM Jan 16th, 2012

ProdMgmtTalk RT @M3_Boost: One of the challenges is communicating the value that the sellers feels is in their
product to the customer #prodmgmttalk -5:14 PM Jan 16th, 2012

rcauvin #prodmgmttalk @markstiving says fixed costs *never* matter when deciding price. #prodmgmt -5:14 PM Jan 16th,
2012

ProdMgmtTalk "My willingness to pay has nothing to do with what it cost to produce product" #prodmgmttalk -5:14 PM Jan
16th, 2012

M3_Boost Erika: I think features are experiences. You buy a feature for the experience it gives you #prodmgmttalk -5:15
PM Jan 16th, 2012

_______________________________________________________________________________________________




DrMEKelly_DUQU @ProdMgmtTalk. Thanks! Learning a lot from all of you #prodmgmttalk -5:15 PM Jan 16th, 2012

ErikaLAndersen RT @rcauvin: #prodmgmttalk @markstiving says fixed costs *never* matter when deciding
price. #prodmgmt#prodmgmttalk -5:15 PM Jan 16th, 2012

ProdMgmtTalk @rcauvin says if value doesn't exceed cost - why are you developing product to begin
with? #prodmgmttalk -5:15 PM Jan 16th, 2012

ProdMgmtTalk Agree RT @M3_Boost: Erika: I think features are experiences. You buy a feature for the experience it
gives you#prodmgmttalk -5:15 PM Jan 16th, 2012

ProdMgmtTalk Charging what customer is willing to pay makes more money (over time?).... #prodmgmttalk -5:16 PM Jan
16th, 2012

CathyLiggett #prodmgmttalk No I'm referring to relative cost, meaning your competition's cost. To maintain competitive
advantage we must price comp -5:16 PM Jan 16th, 2012

ProdMgmtTalk Welcome @CathyLiggett ! #prodmgmttalk -5:16 PM Jan 16th, 2012

MarketingMel @ProdMgmtTalk I'm feeling like I'm back in MBA school listening to @markstiving discuss pricing.
Fascinating!#prodmgmttalk -5:17 PM Jan 16th, 2012

rcauvin #prodmgmttalk @markstiving says you can use cost-plus pricing to set a floor for price, but only in some
cases. #prodmgmt-5:17 PM Jan 16th, 2012

ProdMgmtTalk Cost plus floor is what's lowest possible price to charge a specific customer #prodmgmttalk -5:17 PM Jan
16th, 2012

M3_Boost The price the market will pay can also act as a motivator to reduce your costs (may need deep
pockets)#prodmgmttalk -5:17 PM Jan 16th, 2012

MarkStiving Fixed costs never matter. Never. #prodmgmttalk -5:17 PM Jan 16th, 2012

ProdMgmtTalk Question for you: Q1 How do potential customers use price when deciding on which product to
buy? #prodmgmttalk-5:18 PM Jan 16th, 2012

ProdMgmtTalk @markstiving giving ex: comparing Lexus to BMW when deciding which to buy #prodmgmttalk -5:18 PM
Jan 16th, 2012

CathyLiggett #prodmgmttalk Call me high maintenance, I worry about a cheep car -5:18 PM Jan 16th, 2012

lisaw1 Pricing competitively is tricky since ultimately, you don't want it to be about price; you want it to be about
features.#prodmgmttalk -5:19 PM Jan 16th, 2012

ProdMgmtTalk Regardless of cost of cars - customer looking at 2 dif products & deciding if price difference worth it in
dif features#prodmgmttalk -5:19 PM Jan 16th, 2012

DrMEKelly_DUQU @ProdMgmtTalk. My students become aware of some PM challenges via current job descriptions
= #eyes opened.#prodmgmttalk . -5:19 PM Jan 16th, 2012

rcauvin Do you want to base value/price on features, problems solved, or something else? #prodmgmttalk #prodmgmt -
5:19 PM Jan 16th, 2012

_______________________________________________________________________________________________




MarketingMel Pricing thought for the day: RT @MarkStiving: Fixed costs never matter. Never. #prodmgmttalk -5:20 PM
Jan 16th, 2012

M3_Boost Is the car price differential influenced by prior brand marketing to influence customer self-
image? #prodmgmttalk -5:20 PM Jan 16th, 2012

ProdMgmtTalk @markstiving when it comes to selling/ sell benefits of features always to justify additional price - know
competitive's price #prodmgmttalk -5:20 PM Jan 16th, 2012

ValWorkman @CathyLiggett #prodmgmttalk your right, I think price is a way to compare cars -5:20 PM Jan 16th, 2012

ProdMgmtTalk @rcauvin says features relative to competition determine value of product...@markstiving says
"perceived differentiation" #prodmgmttalk -5:21 PM Jan 16th, 2012

ValWorkman @lisaw1 #prodmgmttalk Features dont -5:21 PM Jan 16th, 2012

ProdMgmtTalk @rcauvin says "something about perceived difference must indicate value for perspective
customer"#prodmgmttalk -5:21 PM Jan 16th, 2012

ValWorkman #prodmgmttalk YES, It's about perceived value of feature. Good points about pricing. -5:22 PM Jan 16th, 2012

MarketingMel @MarkStivin Says perceived differentiation is what matters to your customers and helps them determine
value.#prodmgmttalk -5:22 PM Jan 16th, 2012

ProdMgmtTalk Today's background material: http://t.co/b6wcmhvBUnedited Transcript will be
at http://t.co/YJywt6oh #prodmgmttalk-5:23 PM Jan 16th, 2012

ProdMgmtTalk @markstiving says people buy Guchi bags (not to solve problem necessarily) so they perceive value
(lifestyle issue)#prodmgmttalk -5:23 PM Jan 16th, 2012

ValWorkman #prodmgmttalk The more you differentiate, the more perceived value, the higher price. -5:24 PM Jan 16th, 2012

rcauvin RT @ValWorkman: #prodmgmttalk The more you differentiate, the more perceived value, the higher
price.#prodmgmt -5:24 PM Jan 16th, 2012

M3_Boost A lot of discretionary expenditure (cars?) in B2C is image based. Views on how strong this aspect is in
B2B? #prodmgmttalk-5:25 PM Jan 16th, 2012

ProdMgmtTalk discussing "features vs. problem solutions" w/example "walk into BestBuy to purchase computer - what
will do w/it?" #prodmgmttalk -5:25 PM Jan 16th, 2012

MarketingMel RT @rcauvin: RT @ValWorkman: #prodmgmttalk The more you differentiate, the more perceived value,
the higher price.#prodmgmt -5:25 PM Jan 16th, 2012

ProdMgmtTalk If you're an expert - you make a choice on features - problem solution bigger impact on 1. Will I? spend
$#prodmgmttalk -5:25 PM Jan 16th, 2012

CathyLiggett #prodmgmttalk You guys don't get us girls. Its about how different I look with one bag over another. Much
like adaptation feathers on birds -5:26 PM Jan 16th, 2012

ProdMgmtTalk @M3_Boost INdeed - are you listening? Warning hard to listen & tweet! (out of
sync) http://t.co/bx6cAs6T#prodmgmttalk -5:26 PM Jan 16th, 2012

_______________________________________________________________________________________________




ProdMgmtTalk RT @M3_Boost: A lot of discretionary expenditure (cars?) in B2C is image based. Views on how strong
this aspect is in B2B? #prodmgmttalk -5:26 PM Jan 16th, 2012

DrMEKelly_DUQU @ProdMgmtTalk Q1 Price is under siege due to Groupon, Living Social, etc. teaching customers to
wait for the sale/coupon...#prodmgmttalk -5:27 PM Jan 16th, 2012

ProdMgmtTalk @CathyLiggett exactly - fashion choices are on a different paradigm of problems #prodmgmttalk -5:27 PM
Jan 16th, 2012

ProdMgmtTalk Once you get into "which product will I buy?" you become expert to evaluate features & compare
products#prodmgmttalk -5:28 PM Jan 16th, 2012

pvranas @ProdMgmtTalk How does a customer's cost to build vs. buy play into pricing of services? #prodmgmttalk -
5:29 PM Jan 16th, 2012

ProdMgmtTalk @rcauvin asking about "negative pricing - basing value on amount it costs NOT to use your product -
instead alternative" #prodmgmttalk -5:29 PM Jan 16th, 2012

ProdMgmtTalk Welcome @pvranas #prodmgmttalk -5:29 PM Jan 16th, 2012

pvranas @ProdMgmtTalk Thanks! Glad to be here #prodmgmttalk-5:30 PM Jan 16th, 2012

ProdMgmtTalk @markstiving Total cost of ownership = "What does it cost you to own this, or to own competitive, or
not to own either?" #prodmgmttalk -5:30 PM Jan 16th, 2012

ValWorkman #prodmgmttalk Is this like lost opportunity costs. Should this be subtracted from perceived value? -5:30 PM
Jan 16th, 2012

ProdMgmtTalk There's a dialogue happening on audio
between@rcauvin & @markstiving http://t.co/bx6cAs6T #prodmgmttalk -5:31 PM Jan 16th, 2012

ProdMgmtTalk What is the cost of "emotional pain"? #prodmgmttalk-5:31 PM Jan 16th, 2012

HakanKilic RT @ProdMgmtTalk: What is the cost of "emotional pain"? #prodmgmttalk -5:31 PM Jan 16th, 2012

M3_Boost Total cost of ownership raises how much information the customer has on alternatives and your product.
Info may not be perfect #prodmgmttalk -5:32 PM Jan 16th, 2012

ValWorkman #prodmgmttalk Going with a little known brand, there is a lost cost -5:32 PM Jan 16th, 2012

ProdMgmtTalk In B2B - economic value analysis - dollars & sense analysis, in B2C never about economic value -
rather emotional decision #prodmgmttalk -5:32 PM Jan 16th, 2012

ProdMgmtTalk Welcome @HakanKilic ! #prodmgmttalk -5:32 PM Jan 16th, 2012

rcauvin #prodmgmttalk @markstiving says in B2B pricing, total cost of ownership makes good sense, but not
necessarily in B2C pricing.#prodmgmt -5:32 PM Jan 16th, 2012

ProdMgmtTalk @ValWorkman what do you mean by "lost cost" for little known brand? #prodmgmttalk -5:33 PM Jan
16th, 2012

_______________________________________________________________________________________________




ProdMgmtTalk @M3_Boost need to teach sales to sell perceived value (marketing & sales efforts) must focus on
perception of product - brand #prodmgmttalk -5:34 PM Jan 16th, 2012

ProdMgmtTalk Brand is part of (perceived) value - but build a better mouse trap no longer holds - better products don't
sell w/o marketing #prodmgmttalk -5:35 PM Jan 16th, 2012

ValWorkman #prodmgmttalk Good wrap on this topic. @rcauvin -5:35 PM Jan 16th, 2012

ProdMgmtTalk PEople don't buy true value - they buy perceived value #prodmgmttalk -5:35 PM Jan 16th, 2012

rcauvin #prodmgmttalk @markstiving says perceived value comes from marketing & sales, true value comes from the
product itself.#prodmgmt -5:35 PM Jan 16th, 2012

ProdMgmtTalk Here comes a controversial question: Q4 Is it fair to charge different people different prices? If so,
when?#prodmgmttalk -5:36 PM Jan 16th, 2012

lisaw1 RT @rcauvin: @markstiving says perceived value comes from marketing & sales, true value comes from the
product itself#prodmgmttalk -5:36 PM Jan 16th, 2012

rcauvin #prodmgmttalk Is it fair to charge different customers different prices? If so, why? @markstiving says, "Yes".
What do u think? #prodmgmt -5:36 PM Jan 16th, 2012

ProdMgmtTalk Q4 is for participants to answer! Is it fair to charge different people different prices? If so,
when? #prodmgmttalk -5:37 PM Jan 16th, 2012

ValWorkman #prodmgmttalk more than 75% buy from from a network and that networks perceived value -5:37 PM Jan
16th, 2012

HakanKilic #prodmgmttalk Amazon is a great example, tracks your buying behaviour and charges differently for the
same product -5:37 PM Jan 16th, 2012

MarketingMel RT @ProdMgmtTalk: Q4 is for participants to answer! Is it fair to charge different people different prices?
If so, when?#prodmgmttalk -5:37 PM Jan 16th, 2012

tekzenpdm @ProdMgmtTalk Brand and Value are symbiotic, Better Products deliver better value which in tur builds
brand value#prodmgmttalk -5:37 PM Jan 16th, 2012

M3_Boost I think yes. Challenge is to work out the 'when' and not annoy customers if they find out. #prodmgmttalk -
5:38 PM Jan 16th, 2012

ProdMgmtTalk price segmentation = When you go to movies or fly - every1 pays different price for same experience -
many examples (coupons) #prodmgmttalk -5:38 PM Jan 16th, 2012

ValWorkman #prodmgmttalk 1000000 flies doesn't make it right -5:38 PM Jan 16th, 2012

ProdMgmtTalk RT @HakanKilic: Amazon is a great example, tracks your buying behaviour and charges differently for
the same product#prodmgmttalk -5:38 PM Jan 16th, 2012

_______________________________________________________________________________________________




ProdMgmtTalk Welcome @tekzenpdm #prodmgmttalk -5:38 PM Jan 16th, 2012

HakanKilic #prodmgmttalk Question for everyone - when does price segmentation become price discrimination? -5:38
PM Jan 16th, 2012

ProdMgmtTalk When we think pricing is unfair, almost always when pricing changes - Netflix #prodmgmttalk -5:38 PM
Jan 16th, 2012

MarketingMel Great examples such as movies, airplane seats, of price segmentation. #prodmgmttalk -5:38 PM Jan
16th, 2012

rcauvin If rules are known and clear in advance, it's ok to charge different customers different prices for your
product.#prodmgmttalk #prodmgmt -5:38 PM Jan 16th, 2012

rcauvin RT @HakanKilic: #prodmgmttalk Question for everyone - when does price segmentation become price
discrimination? -5:39 PM Jan 16th, 2012

ProdMgmtTalk RT @HakanKilic: #prodmgmttalk Question for everyone - when does price segmentation become price
discrimination? #prodmgmttalk -5:39 PM Jan 16th, 2012

CathyLiggett @HakanKilic #prodmgmttalk Right, just because I can get away with it doesn't make it right. Whats good
for the economy? -5:40 PM Jan 16th, 2012

rcauvin #prodmgmttalk @markstiving says "price segmentation" & "price discrimination" are the same
thing! #prodmgmt -5:40 PM Jan 16th, 2012

ProdMgmtTalk @hakankilic price segmentation (used in biz world) & price discrimination (used in academia) are the
same#prodmgmttalk -5:40 PM Jan 16th, 2012

tekzenpdm @ProdMgmtTalk @HakanKilic do you think this will alienate some customers? #prodmgmttalk -5:40 PM
Jan 16th, 2012

ProdMgmtTalk Point is to charge price people are willing to pay according to their projected value for same
item #prodmgmttalk-5:41 PM Jan 16th, 2012

HakanKilic @tekzenpdm #prodmgmttalk Think the problem is people don't like the segmentation variables - low supply
means high price, but does gender? -5:41 PM Jan 16th, 2012

ProdMgmtTalk @markstiving says giving lower prices to people w/out lowering prices to people willing to pay more
(fair)#prodmgmttalk -5:41 PM Jan 16th, 2012

rcauvin #prodmgmttalk @HakanKilic, your question is about fairness, right? #prodmgmt -5:42 PM Jan 16th, 2012

ProdMgmtTalk Price segmentation maintains value - charge high price & give discounts to those who prove they
deserve it#prodmgmttalk -5:42 PM Jan 16th, 2012

M3_Boost How much is the ability to differentiate in prices due to pricing power? Consumer may have little
alternative #prodmgmttalk-5:42 PM Jan 16th, 2012

_______________________________________________________________________________________________




ValWorkman #prodmgmttalk Good explanation for price segmentation. It really makes sense. -5:42 PM Jan 16th, 2012

KellyBurroughs There are consumers who 'like' to pay more, as a statement of social status, which to them is part of
the value...#prodmgmttalk -5:42 PM Jan 16th, 2012

ProdMgmtTalk @rcauvin did you cut out of audio? not hearing you#prodmgmttalk -5:42 PM Jan 16th, 2012

ProdMgmtTalk Welcome @KellyBurroughs #prodmgmttalk -5:43 PM Jan 16th, 2012

ProdMgmtTalk @markstiving says to @HakanKilic "but does gender?' cuts to heart of matter; variables are
sensitive #prodmgmttalk -5:44 PM Jan 16th, 2012

ProdMgmtTalk Young men pay higher insurance than young women, women pay higher costs for hair cuts than
men #prodmgmttalk -5:45 PM Jan 16th, 2012

ProdMgmtTalk Don't charge dif prices to dif genders, races or religions - rule of thumb #prodmgmttalk -5:45 PM Jan
16th, 2012

pvranas @ProdMgmtTalk Women's haircuts take longer#prodmgmttalk -5:45 PM Jan 16th, 2012

rcauvin #prodmgmttalk The "fairness" of price discrimination depends on the fairness of the rules used to
discriminate.#prodmgmt -5:45 PM Jan 16th, 2012

HakanKilic RT @pvranas: @ProdMgmtTalk Women's haircuts take longer #prodmgmttalk lol! -5:45 PM Jan 16th, 2012

HakanKilic @rcauvin #prodmgmttalk #prodmgmt Correct, all about what is fair -5:46 PM Jan 16th, 2012

tekzenpdm @ProdMgmtTalk This example is a little different as underwriting plays an important part of this pricing
managing risks.#prodmgmttalk -5:47 PM Jan 16th, 2012

M3_Boost Women haven't experienced cheaper haircuts so not as clearly aware of the price differential. Unofficial
cartel in haircuts!!#prodmgmttalk -5:47 PM Jan 16th, 2012

ProdMgmtTalk @markstiving sees so many rules used for price discrimination - many examples for price
segmentation, ask "why get discount?" #prodmgmttalk -5:47 PM Jan 16th, 2012

HakanKilic @pvranas #prodmgmttalk I'm giving all credit for the haircut comment to @pvranas :) -5:48 PM Jan 16th,
2012

ValWorkman @HakanKilic @rcauvin or is it about what you can get away with it #prodmgmttalk -5:48 PM Jan 16th,
2012

pvranas @HakanKilic Thanks bud :) #prodmgmttalk -5:49 PM Jan 16th, 2012

ProdMgmtTalk @Valworkman going back to fairness question?@markstiving thinks of price discrimination as "marxist
behavior" offer discounts #prodmgmttalk -5:49 PM Jan 16th, 2012

_______________________________________________________________________________________________




ProdMgmtTalk RT @HakanKilic: @pvranas #prodmgmttalk Im giving all credit for the haircut comment
to @pvranas :) #prodmgmttalk-5:49 PM Jan 16th, 2012

rcauvin @ValWorkman @HakanKilic @rcauvin To maintain positive perceptions of the brand, you want sustainable,
fair pricing.#prodmgmttalk -5:49 PM Jan 16th, 2012

ProdMgmtTalk Jumping to 3rd topic: related to segmentation - Pricing a product portfolio (must create portfolio if don't
have)#prodmgmttalk -5:50 PM Jan 16th, 2012

M3_Boost We're thinking of differentiation as a win-lose sit'n. The challenge is to make it seem like a win-
win #prodmgmttalk -5:50 PM Jan 16th, 2012

ProdMgmtTalk Want people willing to pay more to pay more & allow people willing to pay less to still get
product #prodmgmttalk -5:50 PM Jan 16th, 2012

ProdMgmtTalk Indeed! RT @M3_Boost: Were thinking of differentiation as a win-lose sitn. The challenge is to make it
seem like a win-win #prodmgmttalk -5:51 PM Jan 16th, 2012

rcauvin Product portfolio pricing is based on creating "good/better/best" offerings at different price
points.#prodmgmttalk #prodmgmt -5:51 PM Jan 16th, 2012

ProdMgmtTalk Figure out way for people who are price-insensitive to buy best, price sensitive buy good product &
price-uncertain can buy #prodmgmttalk -5:52 PM Jan 16th, 2012

MarketingMel "If you do not have a product portfolio you should be creating one. Build good/better/best
products." #prodmgmttalk -5:52 PM Jan 16th, 2012

ProdMgmtTalk If price is no option - buy most expensive / if price is an issue - buy cheapest / if price point uncertain -
buy middle#prodmgmttalk -5:52 PM Jan 16th, 2012

ProdMgmtTalk Good / better/ best pricing like small/ medium / large milkshake based on value #prodmgmttalk -5:53
PM Jan 16th, 2012

HakanKilic @ProdMgmtTalk #prodmgmttalk My PM friend at P&G did portfolio pricing - premium prod had an orange
pkge, $.03 more, no other difference! -5:54 PM Jan 16th, 2012

ProdMgmtTalk In semiconductor biz - take high rated chips & purposely downgrade them to lower speed to sell at
lower price#prodmgmttalk -5:54 PM Jan 16th, 2012

rcauvin Why do people gravitate to cost-plus pricing?#prodmgmttalk #prodmgmt -5:55 PM Jan 16th, 2012

ProdMgmtTalk Question for participants: Why do people gravitate to cost plus pricing? #prodmgmttalk -5:55 PM Jan
16th, 2012

HakanKilic RT @ProdMgmtTalk: Question for participants: Why do people gravitate to cost plus
pricing? #prodmgmttalk -5:55 PM Jan 16th, 2012

pvranas @ProdMgmtTalk It's the easiest approach #prodmgmttalk-5:56 PM Jan 16th, 2012

_______________________________________________________________________________________________




ProdMgmtTalk A - cost-plus pricing is an easy, simple formula = not what #prodmgmt does #prodmgmttalk -5:56 PM
Jan 16th, 2012

M3_Boost Cost based pricing is easy - it's hard to maintain a pricing process thru life-cycle of product #prodmgmttalk -
5:56 PM Jan 16th, 2012

HakanKilic @rcauvin #prodmgmttalk #prodmgmt my guess - PM uses his P&L and it's the easiest. software cost is not
just R&D headcount though -5:57 PM Jan 16th, 2012

M3_Boost Ask a cost plus approach person - how much is plus? (what size is the margin?) that can
confuse #prodmgmttalk -5:57 PM Jan 16th, 2012

ProdMgmtTalk @markstiving says 2 other reasons besides easy: 1. cost plus pricing guarantees profit at lowest
margin possible#prodmgmttalk -5:57 PM Jan 16th, 2012

tekzenpdm @ProdMgmtTalk Easy to comprehend #prodmgmttalk-5:58 PM Jan 16th, 2012

KellyBurroughs existing in a market driven by price competition could be a valid reason.. #prodmgmttalk -5:58 PM Jan
16th, 2012

ProdMgmtTalk @markstiving gas stations do cost plus pricing - goes up same day as news item that price of oil
rose#prodmgmttalk -5:58 PM Jan 16th, 2012

M3_Boost I like that - cost plus approach can provide market intelligence on competitors #prodmgmttalk -5:59 PM Jan
16th, 2012

rcauvin #prodmgmttalk @markstiving & @HakanKilic agree cost-plus pricing is easy when looking at
P&L. #prodmgmt -5:59 PM Jan 16th, 2012

ProdMgmtTalk 2. cost plus pricing makes marketplace stable - competitors all will be at same level of
pricing #prodmgmttalk -5:59 PM Jan 16th, 2012

tekzenpdm RT @ProdMgmtTalk: 2. cost plus pricing makes marketplace stable – competitors all will be at same level
of pricing#prodmgmttalk -6:00 PM Jan 16th, 2012

ProdMgmtTalk Oh no - hour went too fast! @markstiving is giving out his book http://t.co/d7muQcBK - stand by for
winner!#prodmgmttalk -6:00 PM Jan 16th, 2012

HakanKilic RT @ProdMgmtTalk: #prodmgmttalk Here's a great gas station illegal price fixing cartel
example http://t.co/ACkKdWp2 -6:00 PM Jan 16th, 2012

M3_Boost Gas (fuel) is commodity. Study years ago said the differential on a motorway (UK) was cleanliness of
restrooms!!#prodmgmttalk -6:01 PM Jan 16th, 2012

ValWorkman @ProdMgmtTalk thanks for hosting, thanks to everyone participating in #prodmgmttalk -6:02 PM Jan
16th, 2012

_______________________________________________________________________________________________




MarkStiving All, I had a ton of fun. Thank you. #prodmgmttalk -6:02 PM Jan 16th, 2012

ProdMgmtTalk And the winner of @markstiving 's book is@valworkman ! the number 3 tweeter today (in terms of
amount of tweets) #prodmgmttalk -6:02 PM Jan 16th, 2012

M3_Boost Good chat - good process. #prodmgmttalk -6:02 PM Jan 16th, 2012

ProdMgmtTalk Thank you @MarkStiving for speaking today and@rcauvin for co-hosting #prodmgmttalk -6:02 PM Jan
16th, 2012

MarketingMel Thanks @MarkStiving for a fascinating talk on pricing!#prodmgmttalk -6:03 PM Jan 16th, 2012

lisaw1 @ProdMgmtTalk Thx for hosting! Had technical difficulties:( Enjoyed the discussion though #prodmgmttalk -
6:03 PM Jan 16th, 2012

HakanKilic #prodmgmttalk Thanks everyone for today's session, always love talking about pricing! And
congrats @Valworkman on the free book! -6:03 PM Jan 16th, 2012

KellyBurroughs @ProdMgmtTalk Congrats @valworkman! thanks everyone! #prodmgmttalk -6:04 PM Jan 16th, 2012

ProdMgmtTalk Really appreciate @rcauvin for co-hosting and invite@markstiving back for more! #prodmgmttalk -6:04
PM Jan 16th, 2012

ValWorkman Yes! RT @ProdMgmtTalk: And the winner of@markstiving 's book is @valworkman ! the number 3
tweeter today... #prodmgmttalk -6:04 PM Jan 16th, 2012

pvranas @ProdMgmtTalk Thanks for the event. Very informative.#prodmgmttalk -6:05 PM Jan 16th, 2012

HakanKilic RT @ProdMgmtTalk: Really appreciate @rcauvin for co-hosting and invite @markstiving back for
more! #prodmgmttalkthanks roger and mark! -6:05 PM Jan 16th, 2012

ProdMgmtTalk Thank you everyone for joining in today! The edited transcript & podcast will be available w/in 36 hours
-#prodmgmttalk -6:05 PM Jan 16th, 2012

ProdMgmtTalk Please join us next week for @MarketingMeldiscussing promoting yourself as a brand & product from a
product PR point of view #prodmgmttalk -6:06 PM Jan 16th, 2012

MarkStiving I would be thrilled to come back. Check out my blog for more. http://t.co/Bf7uoMUY #prodmgmttalk -6:06
PM Jan 16th, 2012

ProdMgmtTalk Thank you for joining us today! @valworkman @m3_boost @marketingmel
@hakankilic @cindyfsolomon @tekzenpdm @pvranas @lisaw1 #prodmgmttalk -6:07 PM Jan 16th, 2012

ProdMgmtTalk Bravo! @CathyLiggett @KellyBurroughs @derickworkman #prodmgmttalk -6:09 PM Jan 16th, 2012

ProdMgmtTalk Converse with us http://t.co/y07kOGpk Like Us on Facebook http://t.co/ppUFX3Kv Join Us on LinkedIn
http://t.co/2SwZRb9y #prodmgmttalk -6:09 PM Jan 16th, 2012

_______________________________________________________________________________________________




ProdMgmtTalk Follow Us on BlogTalkRadio http://t.co/rgVn1HbN Listen on iTunes http://t.co/j02YmpOL Recaps
http://t.co/Vpu05U2Z #prodmgmttalk -6:10 PM Jan 16th, 2012

ProdMgmtTalk Read: http://t.co/k1WK97WN and our Twylah page http://t.co/4nJPTQd4 #prodmgmttalk -6:10 PM Jan
16th, 2012

ProdMgmtTalk Make suggestions at: Uservoice http://bit.ly/fPIGob Subscribe: http://t.co/3bSifQnj #prodmgmttalk -
6:10 PM Jan 16th, 2012

ProdMgmtTalk Was today's time good for you? Please fill out our survey http://t.co/Wzt7Lb96
#prodmgmt #prodmgmttalk -6:11 PM Jan 16th, 2012

ProdMgmtTalk Today's Global Product Management Talk stats: 228 tweets generated 283,301 impressions, reaching
audience of 13,207 #prodmgmt #prodmgmttalk -6:16 PM Jan 16th, 2012

ProdMgmtTalk Many questions raised regarding Pricing today - please blog your insights for our blog
at http://t.co/89nt0ATG#prodmgmttalk -6:17 PM Jan 16th, 2012

ProdMgmtTalk Today's unedited transcript of tweets http://t.co/YJywt6oh Scroll to the bottom & read
up!#prodmgmttalk -6:18 PM Jan 16th, 2012

Thank you Mark @MarkStiving for SPEAKING today! Thank you Roger @rcauvin for co-hosting!

Thank you @rcauvin @prodmgmttalk @cathyliggett @valworkman @marketingmel @DrMEKelly_DUQU @M3_Boost
@ErikaLAndersen @lisaw1 @KellyBurroughs @HakanKilic @pvranas @tekzenpdm @derickworkman

Join us next week Jan 23 for the The Brand Called You with Mary Ellen Miller @MarketingMel

Today's stats: 228 tweets generated 283,301 impressions, reaching audience of 13,207

Global Product Management TalkTM is a weekly mini-product camp Socratic discussion of
pre-posted questions with live audio of thought leader and co-hosts commenting.

Converse with us #prodmgmttalk http://bit.ly/i4EihK
Follow Us on BlogTalkRadio http://bit.ly/nbw9Yr
Like Us on Facebook http://on.fb.me/lR0RNP
Join Us on LinkedIn http://linkd.in/jRmwRx
Speaker Schedule http://t.co/R3OL7BDj
Listen on iTunes http://bit.ly/silH98
Android App http://bit.ly/tEeWFx
Newsletter http://t.co/IVVFirUe
Recaps http://bit.ly/slnpP2
Blog http://bit.ly/eOFmB6

_______________________________________________________________________________________________



Jan 16, 2012: Mark Stiving, Ph.D., Discusses Value-based Pricing Strategies @markstiving

Recommended

Recommended

More Related Content

Recently uploaded

Recently uploaded (20)

Featured

Featured (20)

Jan 16, 2012: Mark Stiving, Ph.D., Discusses Value-based Pricing Strategies @markstiving