1. Pricing

2. Pricing
Pricing cannot be built on a ‘one-fits-all’ model.
Pricing is a result of many different aspects within the business. It
should therefore be based on your cost structure and the realized
value for customers and consumers. It’s more than just setting up the
price, it’s finding the right balance between
• conditional
• on- vs off invoice reductions
• limiting exposure
• hedging currency
• timing risks when quoting
It needs a customized approach depending on the business and
product you are selling.
It is important to take pricing as monetizing the value of the product
and service you deliver while taking into account the true value
chain from customer & company perspectives
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3. There are many pitfalls when setting up the right pricing
• Segmenting and capturing the wrong target group
• Choosing the wrong pricing strategy
• Determining the value creation
• Failure to sustain and drive differential value
• Price leakages
• Uncontrolled discounts, allowances and other deductions due to price
leaks
•Poor visibility into pricing transactions leaving managers “blind” to true
price performance
•Conflicting performance metrics that make pricing a political game
between sales, finance, and marketing
•Poorly designed pricing policies that fail to align transaction-level pricing
with the broader pricing strategy
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4. Each organization should ask itself following questions;
1.Does your organization truly understand the economic impact of its
products and services and how/why it varies by customer?
2.Does the current price structure reflect the differences in value to different
customer segments? Is pricing metric appropriate?
3.Is there unnecessary discounting and missed price realization across
customer base?
4.Are pricing strategies aligned with targeting the right segments and gaining
optimal market share?
5.Does the price structure force customers to acknowledge the value of
company’s differentiation?
6.Does the pricing process control customers attempts for negotiating
aggressively?
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5. Determining the right pricing
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6. Pricing is one of the main Marketing drivers, and should not
be looked at independently
Value proposition Value creation Value capturing
Environmental and Competitive Scan
Marketing Strategy Marketing Drivers Customer Equity Marketing Value
Products / Technology
Segmentation & Intention Behaviour
Business Objectives
Targeting
Services
Business Results
Acquisition
Awareness
Purchase Process & Engine
Business Paradigms Experience Price Premium
Perception & Retention
Communication Reputation Commitment
Market Share
Relationship Recommen-
Positioning Preference
Building dation
Channel
Management
Scope
Price Positioning
Deep Channel & Customer Insights
Tangible Action Plans
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7. THoM promotes strategic or value based pricing and
provides tailored consulting solutions in different areas
We will use a combination of content, tools and examples to support better choices with regards
to marketing, pricing and selling
How do we establish prices that reflect value
and drive the optimal mix of volume and margin?
Capture
profit/
growth
How do we increase price realization and
Convince thru profitability through transaction/contract design?
consistent How can we improve negotiation?
policies
How do we influence perceptions of value and
Communicate value willingness to pay through communication?
and frame price
How do we create offerings, value propositions
Create offering choices
and related pricing that maximizes our profitability?
How can we create value among
Comprehend what drives value
different customer segments?
What are the critical customer behaviors required
Target Behaviors, Customer Segments, Leverage Points
to drive growth? How are they best activated
especially given competitive dynamics?
CHANGE CAMPAIGN
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8. Thom performs a 360° audit , using different tools
1. Understanding
customer
behavior and
segments
6. Capture
value: Economic
modeling – 2.
Mapping Comprehending
influence & Tools: customer value
competitive
• Price banding
dynamics
• Price Waterfall
• Pricing decisions & process
mapping
• Price/Value alignments
• Price realization opportunities
3. Creating
5. Improve price
offerings that
policies and
align with value:
processes
price setting
4. Communicate
value and frame
prices
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9. It is important to take three inputs into account when setting
up the strategic pricing
Philosophy: Philosophy:
Financial prudence and ensures Market demands requires that pricing of
that each unit of sale achieves a products and services reflects what
target return over its full cost customers willing to pay
(Finance & Accounting) (Marketing & sales)
Costs Customers
Competition
Philosophy:
Price to maintain or grow market share, short term focus, or “me too”
pricing
(Sales, Management)
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10. THoM’s Pricing service offerings can be bundled in 5 areas
• 360° Pricing Audit
360° Pricing
Audit • Quick hits that identify immediate improvements to
pricing strategy and profit potential
Pricing • Review processes & Implement process improvements
Processes • Link with CPM methodologies
New Product • Price setting (conjoint analysis)
Pricing • Pricing along PLC
• Price menu development (Structured Trade Terms)
Offer
Structuring • Bundling
• Pricing link with segmentation & communication
• Measure price data points per Sales rep
Sales Execution • Develop sales guidelines
• Coach Sales to sell on value (trade-offs / price concessions)
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11. Why the House of Marketing
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12. In a business context where turbulence is the new norm,
The House of Marketing provides marketing excellence at the right
moment, exceeding clients' expectations by delivering higher return
on investment and by making the organization more agile.
We achieve this by recruiting passionate marketers for whom we
create an inspiring and nurturing environment.
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13. What is the current business context?
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14. Business context: Turbulence
Turbulence is a combination of (1) vulnerability and
(2) opportunity.
It is from now on the normal condition of markets and
companies.
It is un-avoidable, but companies can choose how they will
face it.
P. Kotler, Chaotics, 2009
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15. Marketers need to proof themselves ... (again)
They are perceived as being prone to dispersion
and inertia
Their relevance is questioned
They are blamed for lacking business sense
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16. How we make this vulnerable situation an opportunity?
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17. We introduce a strong vision on marketing …
Marketing is a mindset
throughout the whole company,
and only happens through uncompromising
and ruthless focus on the total process of
customer engagement.
Marketing is a key contributor to achieve
business objectives and to optimize
shareholder value.
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18. … applying ‘FACTS’ as guiding principles.
• Simplicity
• Strategic consistency
• Leadership continuity
• Prioritize & making choices
• Consistent brand across all channels
• Seek leadership in specific category
• Customer centricity
• Focused team
• Detect trends & act
• Early warning systems & processes
• Agile & up to date organization
• Built around customer engagement
• Innovative company culture • Willingness to change
• Diversity of profiles • Flexibility & Speed
• Idea generation process
• Idea valuation
• Porosity & open-mindedness
• KPI’s & dashboards
• Scenario analysis & ROMI
• Connect with marketing intelligence
• Analytical culture & skills
• People: yours & every stakeholder
• Planet: ACT on innovation, packaging, promotion...
• Profit: business-minded marketers
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19. We are convinced that the key to long-term profitable
marketing agility lays in organizational flexibility ...
Resource Demand Chart
FTE (hours per month)
Project 1
5,000
Project 2
Project 3
Project 4
4,000
Capacity
3,000
2,000
1,000
0
1/95 4/9 7/9 10/9 1/9 4/9
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20. …. and bridging competence gaps
Data cruncher
Packaging
E-commerce
………
Online specialist
CPM specialist
Performance management
Project Management Shopper marketer
CRM specialist
Mobile marketer
SocialMedia Strategist
……… Web master
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21. How do we work?
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22. We deliver tangible value by bridging the knowing
doing gap
Strategic excellence
Operational
pragmatism
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23. We offer a unique combination of strategic excellence and
operational pragmatism
Strategic excellence Operational pragmatism
• Proven track record in strategic • Track record in making things happen
marketing advice within international and complex
• Creating relevant insights in the companies
business • Applying practical knowledge of
• Identifying the true leverages for successful corporate sales and
significant improvements marketing organizations
• Turning opportunities into structured • Turning initiatives into tangible actions
and prioritized business initiatives
• Helping you to successfully implement
strategic recommendations
We help you in realizing more from your marketing strategies and building the
marketing capabilities for systematic results
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24. We work on temporary assignments….
Mostly function based
Broad FMCG experience B2B and B2C environments
Coordination activities of Marketing plan, go-to-market
specialists in production, sales, strategy & implementation,
Brand advertising, promotion, R&D, … Marketing people management,
Churn analysis, churn Managers business intelligence
Managers Coordination of Marketing
reduction
Product placement activities
optimization
Strong analytical and
Market & competitor
negotiation skills
analysis
Market assessment & Channel & Enhancing retail partnerships
Business by increasing category sales
quantification Category
Analysts Clustering of customers
and aiding in fact
Managers based/strategic selling
E-strategy definition & roll- Extended experience in SME
out and large matrix organizations
E-Marketers Coordination, design & Alignment of organization
& Social implementation of e- Process towards similar goals
marketing actions
Media Website management,
Managers Clear roles & responsibilities
definition, organizational
Specialists email marketing, social design
media, mobile
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25. … and on strategic marketing challenges
Mostly project based
Client challenges THoM expertise & solutions
• Attract new customers • Customer intelligence: translate data into
relevant insights
Volume • Increase customer spending
• Segmentation
driven • Reduce customer churn
• Business and marketing planning
• Increase Innovation success rate
• Innovation Management Program
• Restore customer trust • Customer intelligence: translate data into
relevant insights
• Capture more customer value
Margin • Category assessment
• Margin management
driven • Marketing performance management
• Doing more with less resources (ROMI, CLTV, dashboards)
• Tracking of ROI • Marketing audit
• Define or redefine positioning
• Consumer intelligence: translate data into
• Changing customer experience from
relevant insights
product push to relational (customer-
Positioning centric) • Customer (store) experience
• Positioning on the sustainability dimension • Sustainability
• Positioning towards current and potential • Employer branding
employees
Consumer analytics and insights are crucial for each of the three challenges
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26. To guarantee the excellence, we split marketing into four
expertise areas and develop our people in all four of them
• Market Intelligence • Business & Marketing Planning
I. Strategic • Segmentation • Employer Branding
Marketing • Branding & Positioning • Sustainability
• Pricing • Social Media
II. Go-to- • Product/ Brand/ Category • Shopper Marketing
Management
Market • Customer Relationship
• Communication (offline & Management
online)
• Customer Process Management • Marketing Audit
III. Organization & Change
• • Marketing Coaching & Training
Organization Management
capabilities • Customer Experience
IV. • Marketing Dashboards
Performance • Marketing Performance Management
Management • Customer Lifetime Value & ROMI
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27. You are always hiring a whole team of marketing
specialists
Hiring a THoM consultant isn’t just hiring a person, it’s acquiring expertise:
•THoM consultant: your day to day contact
Visible
• Counselor, Client Manager and Mentor:
first help, coaching and stretched goals for
Invisible the THoM consultant
• All THoM consultants with their specific
skills, expertise and experience: the second
resort for the THoM consultant
• THoM knowledge base (training, career
development plan, books, papers, former
projects, experience of previous THoMers)
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28. To make agility also part of your company DNA, it demands
the right talent at the right place with a continuous evolution
The House of Marketing can help you attract, develop and keep the right talents.
Talent attraction and on the job guidance:
a one company or multi company
Marketing Talent program
program, more details available as from
October 2012
Relevant Marketing training, from general
to very specific & tailor made
- product management
Training - project management
- communication (online, offline)
- social media
- email marketing
-……
Personal coaching focused on marketing
Coaching related skills and technical skills
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29. For whom do we do this?
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30. We have clients from many different sectors (1)
ICT & Media
Utilities &
Resources
Financial &
Other Services
Healthcare &
Public Sector
Transport &
Logistics
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31. We have clients from many different sectors (2)
Consumer
Goods & Retail
Durables &
Industrial Goods
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32. … talking about the tangible value delivered by The House
of Marketing
“THoM’s pragmatic approach is to me a key differentiator,
as they are able to talk the language of actual executors
and to predict or foresee many operational issues we need
to tackle.”
“We appreciated that the THoM team supported us in
(Ronald Hannet, BU Manager) the bottom up approach involving customers,
prospects, sales, specialists.”
(Danny Vandevyver, Head of Marketing
Com Belux)
“THoM succeeded in creating change thanks to
their straightforward and efficient solutions and
approach.” “The added value of THoM is that they do not only
deliver strategic advice, but their recommendations
(Michael De Koster, Segment Manager) are tangible and can be implemented.”
(Luc Deflem, CEO)
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33. So, what can we do for you?
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34. Your personal point of contact
Davy Verhulst
Mobile: +32 (0) 475 83 99 98
E-Mail: Davy.Verhulst@thom.eu
The House of Marketing
Kardinaal Mercierplein, 2
B-2800 Mechelen
Belgium
Fax +32 (0)15 444 044
www.thehouseofmarketing.be
Join us on LinkedIn
Follow us on Twitter
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