Pricing Capability Assessment Framework Overview PPT

This PPT slide, part of the 56-slide Strategic Pricing Framework and Tactics PowerPoint presentation, presents a framework for assessing pricing capabilities across 3 levels: Basic, Average, and Advanced. Each category outlines specific attributes related to business objectives, segmentation, profitability modeling, competitor intelligence, customer interviews, needs mapping, price elasticity, and pricing discipline.

At the Basic level, businesses lack a clear pricing objective, relying on internal assumptions about profit and share. Segmentation is primarily channel-based, with minimal insights into product sub-segmentation. Profitability modeling is rudimentary, focusing on variable material costs at a regional level. Competitor intelligence is absent, and customer interviews are infrequent and qualitative. Needs mapping is unstructured, and price elasticity is assessed through individual sales managers without rigorous analysis. Pricing discipline is weak, with field staff having broad discretion, leading to potential misalignment with pricing strategies.

The Average level shows improvement. Objectives are more defined, aiming to maximize net present value, though constraints are still vague. Segmentation becomes more refined, incorporating product-based sub-segmentation. Profitability modeling includes full cost allocation for major lines,, but insights remain limited. Competitor prices are occasionally monitored, providing a rough guide for pricing decisions. Customer interviews are more quantitative and widespread, enhancing understanding of market dynamics. Needs mapping is directional, and price elasticity assessments are still coarse. Pricing discipline sees clearer rules,, but alignment with incentives is inconsistent.

The Advanced level represents a comprehensive approach. Clear objectives and constraints are established across the organization. Segmentation is needs-based and granular, allowing for detailed customer profitability analysis. Continuous competitor price monitoring informs strategic decisions. Customer interviews are targeted and regular, leading to deep insights into market segments. Price elasticity is rigorously tested through controlled experiments, and pricing strategies are well communicated, ensuring alignment with staff incentives. This framework provides a roadmap for organizations aiming to enhance their pricing capabilities.

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Pricing Strategy Customer Profitability Sales