1. Focuses on value--the value that your new product brings tot the customer.
2. Provides insights into new, innovative ways of delivering your product.
3. Construct a pricing structure that allows you to capture more profit from each sale.

DOCUMENT DESCRIPTION

There are 3 common approaches to pricing: Cost-based Pricing, Competitive Pricing, and Value-based Pricing. This presentation discusses A.T. Kearney's approach to Value-based Pricing.

Value-based Pricing offers numerous distinct advantages over the other 2 pricing methodologies. It is particularly suitable for situations where you are entering a new market, offering a new or distinct product, or where customers do not yet fully understand the impact and benefits of your product. Value-based pricing allows companies to build a deeper understanding of their customers' business drivers, align their goals with the customers' goals, and, ultimately, share in each others' attained value in a way that isn't possible with traditional pricing approaches.

Value-based Pricing requires a significant change in the way most organizations go-to-market. It requires rethinking everything from customer segmentation to product marketing to sales and account management in order to support a new and unique market positioning. Core business processes must be realigned and new business process established. These new processes have deeper analytical capabilities embedded through the organization, especially in Sales.

Topics covered include a comparison of common pricing strategies, principles to value-based pricing, value-based pricing strategy approach, Pricing Staircase framework, Value Ceiling, customer segmentation, pricing structure, Benefits Matrix.

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