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1. Value- Based
Pricing Strategy
Yo u r C o m p a n y N a m e
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2. CONTENT
Types of Pricing Strategy
Need of Value based pricing
› Identify Who Your Customers Are By Creating Buyer Personas
› Conduct Market Research To Learn About Customer Demographics
› Conduct Feature and Product Preference Analysis to Gauge Value
› Conduct Price Sensitivity Analysis to Find Concrete Price Points
› Analyze Buyer Persona Data
How to Execute on a Value-First Pricing Strategy
How to set value-based prices
Use Case
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3. TypesofPricingStrategy Cost-Plus Pricing
› A pricing method in which the selling price is set by evaluating all variable costs. a
company incurs and adding a markup percentage to establish the price
› This is the most basic form of pricing, selling something for more than it costs to make.
› You add up all of the costs of providing the service and then add a profit margin on top to
represent the value you are giving your customers.
Competitor-Based Pricing
› A pricing method that utilizes competitor prices as a benchmark, rather
than setting a price based on company costs or customer value
› This method focuses on information from the market rather than
production costs (cost-plus pricing) and product's perceived value
› The price of competing products is used a benchmark. The business may
sell its product at a price above or below such benchmark
Value Based Pricing
› Basing a product or service's price on how much the target consumers believes it is worth
› Instead of looking inwardly at your own company, or laterally towards your competitors,
with value-based pricing strategy you tend to look outward
› Here you look for pricing information from the people who are going to make a decision
depending on your price
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4. Need of Value
Based Pricing
Willingness to Pay
› This is the main reason you have to go out and ask your potential
customers the value they see in your product
› Company needs to understand what customers will actually pay for
your product
Build the Best Product
› Pricing is also about how you package and offer your selection of
products and features, and to whom
› This approach to pricing will help you understand what your
customers truly want, and what features should be developed over
time
Know your Customers
› By placing a premium on the opinions of your customers, you are focusing
on the people who will be making the buying decisions
› Customers are the ones that will eventually be deciding whether your
pricing and packaging is correct
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5. How to set Value Based Pricing
Identify your customer's
'second-best option'. If your
customer can't buy your
product or service, then
what would they choose?
Find out the price of the
second-best option
List all of the ways in which
your offering is better &
estimate how much you think
these differences are worth
to your customers
List all the ways that the
second-best offering is better
& how much do you think
these are worth to your
customers
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Value-based pricing is
about setting a price that
represents the value the
customer receives from
your product or service -
not the cost of providing it.
Here are a few steps to set
the value-based price.
(Add): Value of your advantages
(Subtract): Value of the second-
best option's advantages
Calculate the best price:
Take the price of the second-best option
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6. How to execute on a
Value-First Pricing Strategy
Identify Who Your Customers Are By Creating Buyer Personas
Conduct Market Research To Learn About Customer Demographics
Conduct Feature and Product Preference Analysis to Gauge Value
Conduct Price Sensitivity Analysis to Find Concrete Price Points
Analyze Buyer Persona Data
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7. Identify Who Your Customers Are By Creating Buyer Personas
PERSONA
Name Text Here
Description Text Here
CUSTOMER JOURNEY
AWARENESS CONSIDERATION DECISION
Describe the customer’s
status in this phase.
Describe the customer’s
status in this phase.
Describe the customer’s
status in this phase.
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DEMOGRAPHICS
Job Title Text Here
Industry Text Here
Education Text Here
Location Text Here
Gender Text Here
Age Text Here
Income Text Here
Family Text Here
Decision Maker? Text Here
MINDSET
What are the customers goals?
Text Here
What are the customer’s problems & pains?
Text Here
What types of solutions does he/she expect?
Text Here
Why wouldn’t this customer use your service?
Text Here
BEFORE & AFTER
Before After
What does the customer have right now? Text Here Text Here
What is the customer feeling? Text Here Text Here
What is the customer’s average day like? Text Here Text Here
What is the customer’s status? Text Here Text Here
LANGUAGE
What words, phrases, clichés, slang, or
patterns of language does the customer
use?
▪ Text Here
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8. Conduct Market Research To Learn About Customer Demographics
Demographic
Age Text Here
Gender Text Here
Nationality Text Here
Ethnicity Text Here
Occupation Text Here
Income Text Here
Family Size Text Here
Nationality Text Here
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9. Conduct Feature & Product
Preference Analysis to Gauge Value
Product
Preference
Analysis
Feature
Analysis
Specify here, out of all the products that we sell, which one provides the most/ least value
Specify here, which feature of our product provides most/least value
Product 1
Product 2
Product 3
Product 4
Feature 1
Feature 2
Feature 3
Feature 4
Product Most Valuable Least Valuable
Features Most Valuable Least Valuable
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10. Conduct Price Sensitivity Analysis to Find Concrete Price Points
› At what price would you consider the product to be so expensive that you would not consider
buying it? This will tell you a price point that is too expensive for this customer
› At what price would you consider the product to be priced so low that you would feel the quality
couldn’t be very good? This will tell you a price point that is too cheap for this customer
› At what price would you consider the product starting to get expensive, so that it is not out of the
question, but you would have to give some thought to buying it? This will tell you a high end of
the range of acceptable prices for this customer
For a given product,
ask customers in a
particular buyer
persona the
following questions:
ID Too Low Low End High End Too High
1 $55 $100 $200 $350
2 $50 $110 $270 $300
3 $40 $80 $190 $290
4 $100 $130 $220 $310
From these results, you’ll see that this buyer persona believes that
a good price range for you’re your product is between
& $220 (The average of the “High End” responses)
$105 (The average of the “Low End” responses)
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11. Analyze Buyer Persona Data
90
60
50
20
15
40
80
0
20
40
60
80
100
0 50 100 150 200 250 300
%SalesLost
Price
Greatest market Capture
Greatest market Capture
With most profitable price
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Once you know about price
sensitivity straight from
individual customers,
aggregate your data to find
the best prices to drive
sales for a particular buyer
persona’s favorite product.
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12. Use Case
In this case, your performance differential relates to your business and customer service. Specifically, your business is based in the US,
offers guaranteed next-day delivery within the US and has UK based customer service including technical advice.
Identify your
market segment
Given your performance differentials, you
determine that your market segment are
customers looking to purchase a laptop who also
value quality, service, and technical support
Determine the price of the next
best alternative
You know that the same model is available online
(from a source which does not offer the same
delivery or service)
Work out your product’s
differentiated worth
You are selling the same basic product, but with the
additional benefits of next-day delivery, superior
customer service and technical support
Example
Electronics
Business
You have a business selling high-tech electronics and computer accessories through an online portal say ABC.
There are other businesses offering comparable and even identical products through the same.
You want to price a new model, quality brand laptop, which your customers can also purchase on other ABC stores as
well as other sites.
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13. Value Based Pricing Strategy Icons Slide
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14. Additional
Slides
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15. Our Mission
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Vision Mission
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Goal
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16. Timeline
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2016 2018
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20192017
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17. Financial
40% 50% 60%
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Minimum
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Medium
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Maximum
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18. Bulb and Idea
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19. Comparison
19
VS
79%
21%
Female
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Male
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20. Target
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01
0304
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21. Puzzle
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Our Team
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23. Magnifying Glass
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24. Thank You
Address
# street number, city, state
Contact Numbers
0123456789
Email Address
emailaddress123@gmail.com
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