1. Submitted by:
Ankush Goyal
Anshu Goyal

2. Introduction
Written By Rafi Mohammed.
It teaches us how to find hidden profits to grow your
business.
It lays emphasis on following the approach of multi
pricing.

3. About the author
A graduate of Boston university, the London school of
Economics and Cornell University.
Director of Simon-Kucher & Partner.
Also authored books like 1% windfall and Online
Marketing.

4. Three Keys to better Pricing
Profitability
Value’s role
Different
Perspectives

5. Profitability Empower your
employees to
make you more
money. Provide
consistent
guidelines on
when to cut
prices.
Create
confidence in
your product.
Make it possible
for your best
customers to
provide you with
additional profits.

6. Value’s Role
Offer
enhanced
Service
• Quicker responsiveness perhaps or services customized
just the way you want them rather than being limited to
generic service bundles.
Provide
peace of
mind
• It can be done by providing insurance, an extended
warranty or a technician who can come to your office and
fix any problem which arise.
Arrange
Financing
• Which makes it easier to buy by providing an extended
period to pay.

7. Different Perspectives
For every product in the world, customers will have
different valuations. If you set just one offer, you are
failing to take advantage of this fact.

8. Ford Motor Company’s Case
Lloyd Hansen analyzed Ford’s pricing practices and
found if he could generate an additional 1% of net
profit margin, this would have the effect of boosting
ford’s
net income by 33%
its cash flow by incredible 45%
Its market valuation by 45%

9. Strategies adopted by Lloyed
Hasen
Empower
the sales
force.
• By sharing with them information about which models were
most profitable and providing incentives on sale of those
models.
Use
promotional
discounts.
• By providing discounts on high margin models.
Cross-sell
financing
• By linking special promotions to customers who would finance their
vehicle purchases through Ford credit.
Restructure
fleet sales
mixes
• So more sales were made to higher margin commercial and Government
fleets while corresponding lower sales were made to the low-margin daily
rental car companies.

10. Decoding the true value of your
product or service
Factors determining value a product in customer’s
mind:
Substitutes Competitors Income Demand Environment

11. Pricing Strategies
Differential Pricing
Versioning
Segment-
based
Market
Conditions

12. Differential Pricing
Use customer characteristics.
Use delivery time differences.
Offer Quality discounts.
Charge differently based on where customers are
making purchase.
Use mixed building.
Negotiation.

13. Versioning
It means having a line of products offered at different
prices to different customers.
Versioning works well because:
1) It allows you to capitalize on different valuations your
customers have.
2) Adding attributes to your basic product can attract
entirely new customers and open up new market.
3) Versioning is cost effective.

14. Segment-based
Interval ownership
Bundling
Leasing
Prepaid
Rental

15. Continued…
Two-part pricing
Hurdles
Payment plans
Customizing pricing
All-you-can-eat pricing

16. Psychological Strategy
The final step in pricing is to make your pricing practices
sparkle by tapping into the ways people think.
 Use the nine and zero effect
 Use a payment plan to enhance satisfaction
 Set your prices high for prestigious products
 Anchor your products appropriately
 Prices to suggest a good quantity to purchase
 Pose your pricing offer as a series of small investments
rather than one sizable transaction