Presentation is loading. Please wait.

Presentation is loading. Please wait.

Pricing Ken Homa.

Published byΕλευθέριος Καραμανλής Modified over 6 years ago

Similar presentations

Presentation on theme: "Pricing Ken Homa."— Presentation transcript:

1 Pricing Ken Homa

2 Supply Chain : Value Added
Profit Value Added Profit Value Added P R I C E Profit Value Added PROFIT R.O.S. R.O.I Parts & Matl SUPPLIER MANUFACTURER DISTRIBUTOR RETAILER

3 Gross to Net Pricing LIST PRICE (GROSS PRICE)
FUNC’L DISC. PROMO ALLOW. INVOICE PRICE (WHOLESALE PRICE) CASH DISC MKTG. PROG. Volume Rebate Coop Advertising NET PRICE

4

5 MARKSTRAT Retail price (MSRP) Avg. retail price Avg. selling price
channel mix Avg. retail price channel margins Avg. selling price

6 MARKSTRAT Retail price (MSRP) Avg. retail price Avg. selling price
channel mix Avg. retail price channel margins Avg. selling price Base cost learning curve Current transfer cost inventory / new production Avg. transfer cost

7 “Right” Price ?

8

9 Pricing Analyses Share gains & losses

10

11 If and only if: all else constant

12 Pricing Analyses Share gains & losses Share loss => price ??? All else constant ‘Unusual’ margins

13

14

15

16 Pricing Analyses Share gains & losses Share loss => price ??? All else constant ‘Unusual’ margins Higher price points, higher margins (generally) Favorable costs or unsustainable prices ? Value mapping

17 Value Map P R I C E BENEFITS Many Few High Low VALUE FUNCTION
VALUE SHORTFALL VALUE SURPLUS

18

19

20

21

22

23 Actual Price = Predicted Price

24 Value Shortfall Value Surplus Actual Price = Predicted Price

25 Pricing Analyses Share gains & losses Share loss => price ??? All else constant ‘Unusual’ margins Higher price points, higher margins (generally) Favorable costs or unsustainable prices ? Value mapping The critical strategic tool When refined, useful tactically Sensitivity analysis

26 What if ?

27

28

29

30

31

32

33

34 Pricing Analyses Share gains & losses Share loss => price ??? All else constant ‘Unusual’ margins Higher price points, higher margins (generally) Favorable costs or unsustainable prices ? Value mapping The critical strategic tool When refined, useful tactically Sensitivity analysis Worst case, breakeven, most likely

35 Real Life Pricing Product proliferation “Managed” allocations
Derivative models “Managed” allocations “Meet competition” quotes Price leaders / followers

Download ppt "Pricing Ken Homa."

Similar presentations

McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 10 The Role of Costs in Pricing Decisions.

McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 10 The Role of Costs in Pricing Decisions.
Chapter 9b Price Setting in the Business World. How are prices set by business people? Costs provide a price floor. See what substitute products are priced.

Chapter 9b Price Setting in the Business World. How are prices set by business people? Costs provide a price floor. See what substitute products are priced.
Modeling Channel Margins Microeconomics revisited 06/06/06.

Modeling Channel Margins Microeconomics revisited 06/06/06.
Copyright © 2006, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Chapter Six Cost-Volume-Profit Relationships.

Copyright © 2006, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin Chapter Six Cost-Volume-Profit Relationships.
ROI. Retail$49.99 Wholesale$39.00 Hardware license($7.00) Manufacturing, packaging, manual($3.00) Distribution costs($0.50) Net revenue per unit$28.50.

ROI. Retail$49.99 Wholesale$39.00 Hardware license($7.00) Manufacturing, packaging, manual($3.00) Distribution costs($0.50) Net revenue per unit$28.50.
Strategic Marketing MKT470 Part 1: Variable Cost 1) Variable Costs 2) Fixed Costs Part 2:Relevant Sunk Cost 1) Relevant Costs 2) Sunk Costs Part 3: Gross.

Strategic Marketing MKT470 Part 1: Variable Cost 1) Variable Costs 2) Fixed Costs Part 2:Relevant Sunk Cost 1) Relevant Costs 2) Sunk Costs Part 3: Gross.
Contemporary Engineering Economics, 4 th edition, © 2007 Cost-Volume-Profit Analysis Lecture No. 30 Chapter 8 Contemporary Engineering Economics Copyright.

Contemporary Engineering Economics, 4 th edition, © 2007 Cost-Volume-Profit Analysis Lecture No. 30 Chapter 8 Contemporary Engineering Economics Copyright.
12-1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Chapter 12 Pricing, Distributing, and Promoting Products.

12-1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall Chapter 12 Pricing, Distributing, and Promoting Products.
Income Statement Net Sales - COGS = Gross Profit - Operating Expenses = Operating Income - Interest expenses & taxes = Net Income.

Income Statement Net Sales - COGS = Gross Profit - Operating Expenses = Operating Income - Interest expenses & taxes = Net Income.
Optimum Distribution Formula What is the probability of selling the next copy distributed? How much did it cost to distribute/produce that copy?

Optimum Distribution Formula What is the probability of selling the next copy distributed? How much did it cost to distribute/produce that copy?
Analyzing Cost, Volume, and Pricing to Increase Profitability Chapter 3.

Analyzing Cost, Volume, and Pricing to Increase Profitability Chapter 3.
What’s Happening? =9mIBKifOOQQ =9mIBKifOOQQ.

What’s Happening? =9mIBKifOOQQ =9mIBKifOOQQ.
Pricing Strategy …critical marketing mix variable actually produces revenue shortest term marketing mix variable relates directly to microeconomics supply.

Pricing Strategy …critical marketing mix variable actually produces revenue shortest term marketing mix variable relates directly to microeconomics supply.
New Vehicle Sales +42%, Gross +49% Used Vehicle Sales +19%, Gross +20% Service RO Count +22%, Gross +33% Parts Gross +24% Total Gross +36% Total Net.

New Vehicle Sales +42%, Gross +49% Used Vehicle Sales +19%, Gross +20% Service RO Count +22%, Gross +33% Parts Gross +24% Total Gross +36% Total Net.
Chapter 5. Assumptions of CVP Analysis  Selling price is constant.  Costs are linear.  In multi-product companies, the sales mix is constant.  In.

Chapter 5. Assumptions of CVP Analysis  Selling price is constant.  Costs are linear.  In multi-product companies, the sales mix is constant.  In.
Kristina Marsh Marketing Flexibility, LLC

Kristina Marsh Marketing Flexibility, LLC
Copyright © The McGraw-Hill Companies, Inc 2011 COST-VOLUME-PROFIT RELATIONSHIPS Chapter 4.

Copyright © The McGraw-Hill Companies, Inc 2011 COST-VOLUME-PROFIT RELATIONSHIPS Chapter 4.
CHAPTER 11 Pricing The Product

CHAPTER 11 Pricing The Product
Chapter 18 Price Setting in the Business World. How are prices set by business people? Costs provide a price floor. See what substitute products are priced.

Chapter 18 Price Setting in the Business World. How are prices set by business people? Costs provide a price floor. See what substitute products are priced.
Chapter 20 Cost-Volume-Profit Analysis

Chapter 20 Cost-Volume-Profit Analysis

Similar presentations

Ads by Google