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Mastering Value-Based Pricing

Gain knowledge about cost-based to value-based pricing and enabling to move towards value-based pricing.

Mastering Value-Based Pricing

Gain knowledge about cost-based to value-based pricing and enabling to move towards value-based pricing.
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In this section, we will discuss what is pricing and why is it important. Then, we will discuss what is Cost-based pricing through an example.
In this video, we explain the importance of pricing for a seller of products or a provider of services.
This video explains what is Cost-based pricing. On a macro level, we can state that when we use Cost-based pricing, we set the price of a product or server as the sum of the cost involved in developing the product or the cost involved in providing a service and the profit we would like to make from the sale of the product or service.
In this video, we walk through a complete example of Cost-based pricing. There are a lot of numbers discussed in this video. So, feel free to pause at any time and calculate for yourself to understand better.
We will take a walk through a deal signed between Reliance Telecom Ltd and Siemens Informations System Ltd for the supply of GPRS billing system.
This video provides a short introduction to Reliance Telecom Ltd.
This video provides a short introduction to the project with RTL being discussed in this case study.
This video states the price Siemens proposed to RTL for the GPRS Billing system. One can see that this is also an example of Cost-based pricing.
This video tells the story of how the negotiations proceeded between Siemens and RTL for the GPRS Billing system project. What needs understanding is that the customer may not be willing to pay a price that the vendor wants to charge for a product. In these situations, the vendor needs to decide whether they would proceed with the deal or not.
This video discusses the strategy as to how we planned the initial delivery of the GPRS Billing system to RTL. This video also gives a very brief introduction to the technicalities involved in making a GPRS Billing system or any Telecom Billing system for that matter.
This video discusses the Impact of the initial delivery made to RTL for the GPRS Billing system.
This video provides a rough estimate for the revenue RTL would have generated from the launch of the data services. It is important for Vendors to understand this as this would give them an idea of what a system provided to such customer would mean for the customer.
What is Value-based pricing? What are the 4 pillars of Value-based pricing? What do you mean by customer insights? What do you mean by Pricing Economics, Price Management, and Price Psychology?
In this video, we define Value-based pricing from a different perspective. We also look at an example of a company who has implemented Value-based pricing.
This video states the 4 pillars of Value-based pricing i.e. Customer Insights, Price Economics, Price Management, and Pricing Psychology. In the subsequent videos, we will discuss each of these 4 pillars of Value-based pricing in details.
This video explains that we should have something unique in our product or service offering which will add a tremendous amount of value to the customer. Only when this is achieved, we can actually discuss a price with the customer based on value.
This video discusses the aspects of Customer Insights for being able to conduct Value-based pricing. Knowing why the customer wants the product or service is vital information in terms of determining how much to charge for the products or services.
In this video, we discuss Pricing Economics. We will see that quoting low prices is not a guarantee for getting a higher amount of sales. Similarly, we will see that increasing price always does not result in lowering of demand.
In this video, we see that Pricing management is essentially Discount management. We learn that discount should always be given at a cost to the customer.
This video discusses Pricing psychology. It is important to understand that customer behavior is dictated by the Customer's perception of the price.
What are some techniques to sell at the price that the product deserves?
This video discusses why we must create separate versions/brand for Price-Seekers and Value-Seekers.
This video discusses why we should start selling from the highest option and coming down to the lower options and each step we must explain to the customer what he/she will loose.
This video reiterates and reemphasizes that discounts should never be given for FREE.
This video discusses why it is important to understand what the customer wants. Value can be created only if we have a clear idea of customer needs. And only when a value is created, can we charge for that.
This video discusses the technique that we must create a higher product option for the target product option we want to sell the most.
This section summarises the course and Thanks to the students for going through the course.

Pricing is a very important aspect of being able to sell a product or a service. I understand this even more after I started my own business. When I started initially, the only way I used to price for our products and services was to determine the cost incurred by us and then adding a suitable margin of profit on top of that.

However, this is not always the best way to get returns for what we have worked for. A much superior way is to price based on the value of what we are offering as a product or service.

This course discusses the nuances of value-based pricing.

While we try to examine all aspects discussed in this course from a general perspective, I have focused on how a small firm should approach pricing for its products and services. Further, while we also discuss general consumer products, I have focused on products and services offered by one organization to another organization.

I have tried to include a lot of examples so that it becomes easy to understand the discussions. The examples are taken from real situations and thus should help understand not only the concepts; but also the various practical implications and remedies.

Requirements

  • You should have a brief knowledge of economics (but not necessary).
  • You should have a brief knowledge of costing (but not necessary).
  • Some experience of doing business (independently or as a part of a company) in any form would help (but not necessary)
In this section, we will discuss what is pricing and why is it important. Then, we will discuss what is Cost-based pricing through an example.
In this video, we explain the importance of pricing for a seller of products or a provider of services.
This video explains what is Cost-based pricing. On a macro level, we can state that when we use Cost-based pricing, we set the price of a product or server as the sum of the cost involved in developing the product or the cost involved in providing a service and the profit we would like to make from the sale of the product or service.
In this video, we walk through a complete example of Cost-based pricing. There are a lot of numbers discussed in this video. So, feel free to pause at any time and calculate for yourself to understand better.
We will take a walk through a deal signed between Reliance Telecom Ltd and Siemens Informations System Ltd for the supply of GPRS billing system.
This video provides a short introduction to Reliance Telecom Ltd.
This video provides a short introduction to the project with RTL being discussed in this case study.
This video states the price Siemens proposed to RTL for the GPRS Billing system. One can see that this is also an example of Cost-based pricing.
This video tells the story of how the negotiations proceeded between Siemens and RTL for the GPRS Billing system project. What needs understanding is that the customer may not be willing to pay a price that the vendor wants to charge for a product. In these situations, the vendor needs to decide whether they would proceed with the deal or not.
This video discusses the strategy as to how we planned the initial delivery of the GPRS Billing system to RTL. This video also gives a very brief introduction to the technicalities involved in making a GPRS Billing system or any Telecom Billing system for that matter.
This video discusses the Impact of the initial delivery made to RTL for the GPRS Billing system.
This video provides a rough estimate for the revenue RTL would have generated from the launch of the data services. It is important for Vendors to understand this as this would give them an idea of what a system provided to such customer would mean for the customer.
What is Value-based pricing? What are the 4 pillars of Value-based pricing? What do you mean by customer insights? What do you mean by Pricing Economics, Price Management, and Price Psychology?
In this video, we define Value-based pricing from a different perspective. We also look at an example of a company who has implemented Value-based pricing.
This video states the 4 pillars of Value-based pricing i.e. Customer Insights, Price Economics, Price Management, and Pricing Psychology. In the subsequent videos, we will discuss each of these 4 pillars of Value-based pricing in details.
This video explains that we should have something unique in our product or service offering which will add a tremendous amount of value to the customer. Only when this is achieved, we can actually discuss a price with the customer based on value.
This video discusses the aspects of Customer Insights for being able to conduct Value-based pricing. Knowing why the customer wants the product or service is vital information in terms of determining how much to charge for the products or services.
In this video, we discuss Pricing Economics. We will see that quoting low prices is not a guarantee for getting a higher amount of sales. Similarly, we will see that increasing price always does not result in lowering of demand.
In this video, we see that Pricing management is essentially Discount management. We learn that discount should always be given at a cost to the customer.
This video discusses Pricing psychology. It is important to understand that customer behavior is dictated by the Customer's perception of the price.
What are some techniques to sell at the price that the product deserves?
This video discusses why we must create separate versions/brand for Price-Seekers and Value-Seekers.
This video discusses why we should start selling from the highest option and coming down to the lower options and each step we must explain to the customer what he/she will loose.
This video reiterates and reemphasizes that discounts should never be given for FREE.
This video discusses why it is important to understand what the customer wants. Value can be created only if we have a clear idea of customer needs. And only when a value is created, can we charge for that.
This video discusses the technique that we must create a higher product option for the target product option we want to sell the most.
This section summarises the course and Thanks to the students for going through the course.

About the instructors

 

Partha Majumdar

Just a Programmer
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Partha started his career in 1989 as a programmer. In his first assignment, he was involved in development of a Cricket Tournament management system as a part of the team from Centre for Development of Telematics (C-DOT) requested by the Prime Minister of India, Mr. Rajiv Gandhi. Since then Partha has developed Tea Garden automation solution, Hospital Management solution, Travel Management solution, Manufacturing Resource Planning (MRP II) solution, Insurance Management solution and Tax automation solution (for Government of Thailand).
 
Partha got involved in Telecom solution with project from Total Access Communications, Bangkok in 1996. Partha developed the completed solution architecture and designed & developed the complete infrastructure services and primitives on top of which the end-to-end Customer Care and Billing solution was developed between 1996-1998.
 
Partha has worked for companies including Amdocs, Portal, Siemens and has developed key components of their solutions. For Siemens, Partha developed the complete BSS suite.
 
Partha worked with Mobily, Saudi Arabia as the Enterprise Architect and has first-hand of experience of work inside a Telecom Operator.

Partha started his own company, Majumdar Consultancy Pvt Ltd, in 2014. He partnered with a Dubai based businessman to open SI Solutions India Pvt Ltd in 2016. In 2019, he joined Tools and Solutions, Saudi Arabia as Director - Professional Services to establish the Professional Services business.
 
Partha has recently developed a Remote Control, which can be controlled from a Web Site. The Remote Control can in turn control any device. The Remote Control to be controlled needs having Infra-Red sensing capabilities. The Remote Control is controlled through DragonBoard 410C through a Android Program.


Partha has been working on fine tuning the algorithm for a Access Control System through Face Recognition. The program has been developed using Convolutional Neural Network (CNN).


Partha has also developed a software which tries to predict the Stock Market. The solution has been developed using Recurrent Neural Network (RNN). The solution presently predict with an accuracy of 77%.

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