1. Price & Value Management Why Not Take Both Paths to Profit?
2. Discussion Flow Are we price managers or value merchants? Packing the essential tools Choosing the right path Reaching the summit Wrap-up
3. Creating measurable, differential value for the value chain Maximizing the profit captured by the enterprise What is value management? 1 2
4. Pricing and transaction management are components… Pricing Strategy Process Excellence Tools & Software Leadership & Learning Value in Market Value in Innovation 4 The value merchant’s role Transaction Management
16. Discussion Flow Are we price managers or value merchants? Packing the essential tools Choosing the right path Reaching the summit Wrap-up
17. Four basic tools to guide any journey Value Management Economic Value Estimation Pocket Waterfall Value Map Price Band Price Management
18. How is value measured? Two Schools of Thought “Value is Relative”- - Perceived Value “Value is Quantifiable”- - Economic Value Decision to use oneor both dependingon the uniquesituation Value maps Price vs. performance Relative market position Waterfall charts Economic Value Estimate Return on investment Tools Alignment of Price and Value
19. The Value Map shows the position of each competitor in terms of the overall cost versus the overall benefit. Higher Cost Relative Price Lower Cost Worse Value Premium Average Better Value Economy Fair Value Line Relative Perceived Value School #1: Perceived Value Inferior Superior
20. A Value Waterfall is used for estimating the economic value-in-use of solutions. This tool is most effective when your business has a clear economic advantage over a specific competitor and when it is logical that the customer would monetize the relative benefits of your offer. $ Variance Benefit vs. CurrentSolution Savings Break Even Current Solution School #2: Economic Value
21. Discussion Flow Are we price managers or value merchants? Packing the essential tools Choosing the right path Reaching the summit Wrap-up
22. The conventional route to the summit 12 Strategy Development and Planning Execution Performance Tracking and Evaluation
23. Consider all of the available routes 13 Order Fulfillment Customers Suppliers Product Life Cycle Management Enabling Systems & Capabilities Leadership & Learning InformationSystems Customer Engagement Customers
24. Why not start with the customer engagement process? 14 segmentation value quantification Plan Plan Engagement Sense Measure Assess Needs & Value Assess Results •Issues •Tactics •Negotiations value analysis Refine Offer & Value Proposition Present & Deploy Solution Manage Convey value communication offer management
25. What role can we play in the new product development process? 15 value hypothesis transaction model price and positioning demand & revenue management
26. Start small. Get some wins. 16 Determine if a process exists…Help define the process Pick one or two stages of the process to improve Customize the tool kit Test the approach Train the organization Replicate and scale up
27. Discussion Flow Are we price managers or value merchants? Packing the essential tools Choosing the right path Reaching the summit Wrap-up
28. Reaching the summit. Navigating the crevasses. Which trailhead? Price Orientation Value Orientation Value Share Communication Gap Segmentation Gap Negotiation Gap Transaction Gap Theoretical Value Commercial Value Conveyed Value Accepted Value Transacted Value Captured Value