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Pricing Control ...
Pricing Control ‐ process Manager of the pricing process Creation of  ...
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Pricing control - your hidden margin source

the profit you built with your go-to-market strategy is dispersed by a tolerant sales force?I really appreciate if you take time to rate, share, comment this document. Your suggestions help me expand and correct it, and i will quote any contribution.www.business-explorati... You do not want that most of the profit you built with your go-to-market strategy is dispersed by a tolerant sales force, don’t you? Me neither. So I have developed a process to put in control how price is defined and declared to customers. It works for all the Companies pricing on a deal by deal basis, but also for those that has flexible catalogues.1) Recognize pricing control is a “control” problem: Being able to manage price offered so thata) Price is aligned with a benchmarkb) Price is within tolerance2) Control requires a managing process A process capable to :a) Recognize and classify the product being offeredb) Compare prize offered with an acceptance criteriac) Manage deviations from an acceptance criteriad) Collect information capable to adjust the acceptance criteria 3) Acceptance criteria depend by deal value and deal frequencya) High value : ad hoc criteriab) Normal Value: price has to be within a tolerance whose width is set with reference of the overall deals portfolio value tolerance. ( this will grant that the overall portfolio value will be kept above a minimum threshold)c) Low Value: tolerance based on statistical criteria: ( the goal is the average price on several deals , so that the alarm is not working for each failure in keeping the tolerance, and the portfolio overall value will be kept within acceptance.
Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Pricing control - your hidden margin source

  • 1. Business Exploration® We appreciate your feedback, comments, suggestions and encouragement: Write to: flavio@ingtosi.it, we will do our best to answer promptly. Note to the Reader: This e‐Book is free. You can duplicate it and share it it. You can download it at www.business‐exploration.com. You can copy part of it, or reproduce part of it, quoting the author: Flavio Tosi and the web site: www.business‐exploration.com. Business Exploration Roadmaps are copyrighted by Flavio Tosi – Business Exploration®. © 2011 – ing. Flavio Tosi – Albo Ingg. Firenze #3581 ‐ Business Exploration ® ‐ all rights reserved. About the author: Flavio Tosi is a Business Consultant who helps entrepreneurs turn ideas into money, filling the gaps of competence, resources and methodology in marketing innovation. With more than 15 years experience in the h h tech equipment industry, Flavio’s work l f h span h h h high h d l ’ k life has R&D design Engineering, Project Management, Business Process Re‐engineering, Strategic Marketing and Business Development. He holds an MBA from SDA Bocconi – Milano, a Ms in Aeronautical Engineering from Politecnico di , g g Milano, is a certified Project Manager by IAFE School of ENI and a certified Six Sigma Black Belt and Green Belt by General Electric. You can find more about Flavio Tosi and his services on: www.business‐exploration.com. b i l ti www.business‐exploration.coming. Flavio Tosi  – Albo ingg.  Firenze # 3581                                                                                                             ©2009  ‐ all rights reserved ‐ free to be distributed
  • 2. Pricing Control Typical control run‐chart: 1) Pricing control: a “control” problem: Being able to manage price offered so that a) Price is alligned with a benchmark b) Price is within tolerance 2) Control requires a managing process: A process capable to : 1) Recognize and classify the product being offered 2) Compare prize offered with an accceptaqce criteria 3) Manage deviations from an acceptance criteria 4) Collect inforamtion capable to adjust the acceptance criteria  3) Acceptance criteria depend by deal value and deal frequency a) High value : ad hoc criteria b) Normal Value: price has to be within a tolerance whose width is set  with  reference of the overall deals portfolio value tolerance. ( this will grant that the  overall portfolio value will be kept above a minimum threshold) c) Low Value: tolerance based on statistical criteria: ( the goal is the average price  on several deals ,  so that the alarm is not working for each  failure in keeping the  tolerance, and the portfolio overall value will be kept within acceptance. www.business‐exploration.coming. Flavio Tosi  – Albo ingg.  Firenze # 3581                                                                                                             ©2009  ‐ all rights reserved ‐ free to be distributed
  • 3. Pricing Control ‐ process Manager of the pricing process Creation of  Creation of  Results  product  acceptance  analiysis classes criteria Sales Manager Comparision of  Identification  the price with  the price with To  To START of the product  f h d Price setting Pi i Offering issue Off i i Deal result D l l the becnhmark  manufacturing class criteria Definition of  deviation  request Top Manager Comparison with  deviation  acceptance  criteria Offering  Workflow required  cancellation Workflow support? www.business‐exploration.coming. Flavio Tosi  – Albo ingg.  Firenze # 3581                                                                                                             ©2009  ‐ all rights reserved ‐ free to be distributed
  • 4. Pricing Control ‐ criteria Probability plot of deals distribution: AD HOC AD HOC P75 BUTION Max DEAL DISTRIB P50 min Statistical DEAL  VALUE  DEAL VALUE www.business‐exploration.coming. Flavio Tosi  – Albo ingg.  Firenze # 3581                                                                                                             ©2009  ‐ all rights reserved ‐ free to be distributed

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