1
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VALUE-BASED PRICING
PART 2:
WHAT IS “VALUE” IN
VALUE-BASED PRICING?
2
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PART 2:
WHAT’S A VALUE
STACK?
Key takeaways
How to construct a value stack?
What are the laye...
3
www.pricinginnovations.com
WHAT’S A
VALUE STACK?
www.pricinginnovations.com
4
Basis of
Competition
ReferenceValue
What’s It Worth to
You?
Exchange Value of
Acquisition
Tot...
www.pricinginnovations.com
5
The value delivered by the features, functionality, and
attributes that make up the “basis of...
www.pricinginnovations.com
6
The value of the differentiated features or attributes of a solution stack.
Differentiated va...
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7
A buyer’s opinion of a product's value to him or her. It could be
highly contextual and it in...
www.pricinginnovations.com
8
Buyers acquire solutions when their
perceived value of the benefit is greater
than its price....
www.pricinginnovations.com
9
The total financial value of the benefits provided by an
individual feature or combinations o...
10
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HOW TO
CONSTRUCT A
VALUE STACK?
11
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Reference Value
Differentiation Value
Economic Value
Differentiation Value
Economic Value
Re...
12
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Differentiation Value
Economic Value
Differentiation Value
Economic Value
Reference Value
ST...
13
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Differentiation Value
Economic Value
Differentiation Value
Economic Value
Reference Value
PO...
14
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KEY TAKEAWAYS:
WHAT IS “VALUE” IN
VALUE-BASED PRICING?
The goal of value-based pricing is to...
15
www.pricinginnovations.com
SEE ALSO PART 3:
HOW TO CREATE
DIFFERENTIATION?
PRICING INNOVATIONS
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Pricing Innovations: What Is "Value" in Value-Based Pricing?

Part 2 of our pricing series aims to answer explain the layers and different types of "value" in value based pricing. We then look at how to find the right pricing window for differentiated solutions.
Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Pricing Innovations: What Is "Value" in Value-Based Pricing?

  • 1. 1 www.pricinginnovations.com VALUE-BASED PRICING PART 2: WHAT IS “VALUE” IN VALUE-BASED PRICING?
  • 2. 2 www.pricinginnovations.com PART 2: WHAT’S A VALUE STACK? Key takeaways How to construct a value stack? What are the layers of a value stack? What do we mean by value-stack?
  • 3. 3 www.pricinginnovations.com WHAT’S A VALUE STACK?
  • 4. www.pricinginnovations.com 4 Basis of Competition ReferenceValue What’s It Worth to You? Exchange Value of Acquisition Total Financial Benefits of a Solution PerceivedValue Price Point Economic Value THE VALUE STACK Positive or Negative Differentiation Differentiation Value
  • 5. www.pricinginnovations.com 5 The value delivered by the features, functionality, and attributes that make up the “basis of competition” or a substitute solution. Basis of Competition ReferenceValue REFERENCE VALUE
  • 6. www.pricinginnovations.com 6 The value of the differentiated features or attributes of a solution stack. Differentiated value can be positive or negative. Positive or Negative Differentiation Differentiation Value DIFFERENTIATION VALUE
  • 7. www.pricinginnovations.com 7 A buyer’s opinion of a product's value to him or her. It could be highly contextual and it influences his/her willingness to pay. What’s It Worth to You? PerceivedValue PERCEIVED VALUE
  • 8. www.pricinginnovations.com 8 Buyers acquire solutions when their perceived value of the benefit is greater than its price. Exchange Value of Acquisition Price Point PRICE POINT
  • 9. www.pricinginnovations.com 9 The total financial value of the benefits provided by an individual feature or combinations of features of a solution. Total Financial Benefits of a Solution Economic Value ECONOMIC VALUE
  • 10. 10 www.pricinginnovations.com HOW TO CONSTRUCT A VALUE STACK?
  • 11. 11 www.pricinginnovations.com Reference Value Differentiation Value Economic Value Differentiation Value Economic Value Reference Value STEP 1: FIND THE RIGHT REFERENCE VALUE POSITIVE DIFFERENTIATION NEGATIVE DIFFERENTIATION
  • 12. 12 www.pricinginnovations.com Differentiation Value Economic Value Differentiation Value Economic Value Reference Value STEP 2: FIND OUT THE PERCEIVED VALUE Reference Value per·ceived val·ue POSITIVE DIFFERENTIATION NEGATIVE DIFFERENTIATION
  • 13. 13 www.pricinginnovations.com Differentiation Value Economic Value Differentiation Value Economic Value Reference Value POSITIVE DIFFERENTIATION NEGATIVE DIFFERENTIATION Reference Value STEP 3: FIND THE RIGHT PRICE WINDOW Price Window
  • 14. 14 www.pricinginnovations.com KEY TAKEAWAYS: WHAT IS “VALUE” IN VALUE-BASED PRICING? The goal of value-based pricing is to price an offering in accordance with the value it delivers To construct a value stack begin by finding the right reference value. Then quantify the value of the differentiation to arrive at the economic value The layers of a value stack are the reference value, differentiated value, perceived value, price point, and economic value A value stack is used to quantify each layer of a value proposition
  • 15. 15 www.pricinginnovations.com SEE ALSO PART 3: HOW TO CREATE DIFFERENTIATION? PRICING INNOVATIONS

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