9.- Pricing Fundamentals, Part 1

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来自 IESE Business School 的课程

Marketing: Customer Needs and Wants

155 个评分

IESE Business School

Marketing: Customer Needs and Wants

155 个评分

课程 3（共 5 门，Specialization Foundations of Management）

Understanding who your customers are and what they need and want is at the heart of successful marketing strategies. In this course you will explore how to identify and classify customers and the different methods that marketing professionals use to shed light on how they make purchase decisions. The course will cover the following: 1. Marketing Fundamentals 2. Product, Pricing and Channel Decisions 3. Building Strong Brands 4. Communication Strategy

从本节课中

Week 2: Product, Pricing & Channel Design

It’s hard to remember what the world was like before iPods, iPhones and iPads. But when Apple released the first iPod in 2001, it was not an automatic blockbuster. The product was great, but it took a lot of marketing savvy to set it on it’s successful path. All companies – whether selling electronics, gastronomic experiences, or credit cards – need to worry about making product, pricing and channel decisions. In this second session, we will explore what a product really is, how to estimate its demand and manage it. In addition, we’ll discuss the fundamentals of pricing, channel design and channel management. Objective: To gain an understanding of what a product really is, how to manage pricing and make decisions about channels.

1.- Week 2 Intro2:55

2.- Product Definition, Part 17:19

3.- Product Definition, Part 23:57

4.- Estimating Product Demand, Part 14:57

5.- Estimating Product Demand, Part 24:16

6.- Managing Products, Part 13:53

7.- Managing Products, Part 25:14

8.- Managing Products, Part 33:29

9.- Pricing Fundamentals, Part 15:28

10.- Pricing Fundamentals, Part 24:46

11.- Pricing Fundamentals, Part 33:35

12.- Pricing Fundamentals, Part 45:07

13.- Pricing Fundamentals, Part 54:18

14.- Channel Design, Part 14:20

15.- Channel Design, Part 27:32

16.- Channel Management7:58

17.- Week 2 Recap1:21

与讲师见面

Mario Capizzani
Lecturer
Marketing

[MUSIC]

Well, so why is pricing so important?

Let's have a look at this chart.

This, our questions ranked on a 1, less important, to 5, most important in

top executive minds as to what is their most important or a high pressure problem.

Look at price, the price of consumer goods and the price of industrial goods and

of services rank at the top.

So one of the reasons as to why we should spend some time in pricing is because it's

one of the marketing variables or

marketing challenges that is at the top of executive minds.

Now, you may ask,

why do they consider pricing to be such a high pressure problem?

Well, the answer is here.

This is a study based on an average of something around 2,500

companies from the Compustat aggregate index whereby

we can see on an average what will happen to a 1% increase or

improvement in price in comparison to some other variables, and a couple of income

statement, and what their relevant impact is of that improvement on the bottom line?

Let's look at the variable cost.

A reduction in variable cost of 1% will improve your net income in

approximately 7.8%.

An increase in volume, approximately, will improve about half as much 3.3 and

reducing fix costs will improve your bottom line 2.3%.

What do you think the impact of price is on the net income of a company.

You've guessed right.

Price is the most important variable affecting the income statement.

A 1% improve in price will affect on the aggregate for

these 2,500 companies, approximately 11% your bottom line results.

So since it is such a high pressure problem, because it has a tremendous

impact on your bottom line results, let's look how much executives know.

How do they rate that they know, or what do they know about pricing?

And as you can see, once we take into account costs, variable costs,

fixed costs, and competitive prices, and then product value to customers and

price response, only somewhere between 30% and 60% of top managers

seem to claim that they are well-informed about these two fundamental variables.

So given that price is so important and

that top executives seems to be relatively uninformed or

not as well-informed about these fundamental variable, let's go and try to

review how you should think about setting up prices for your products or services.

So before we can speak about prices, we have to understand a thing or

two about cost.

There are three important cost that we need to take into account.

First of all is the variable cost.

Let's take the case, as an example, for a hotel, for example.

The variable cost is the one that truly depends on the level of activity, right?

So if you're going to rent an extra room, what you really want to determine is what

is the extra cost of renting that room to try to be able to determine at what's

the minimum price at which I can actually be able to sell the room for the night?

So the variable cost or

the variable activity might be the time of the person cleaning the room,

or it might be the supplies that are needed to clean the room, or

the cost of switching the linens or the bathroom toiletries, etc., right?

So those are costs that actually depend on the level of activity and

that are specific to that one additional room.

On the other hand, there are semi-fixed costs.

These costs only scale in steps.

For example, employees might be a semi-fixed cost, because for example,

you might operate a hotel with a certain set of people during the low season,

say in the winter, versus a different set of people, in the summer,

where the activity of the hotel climbs up to a different level of activity.

And in the other hand, there are fixed costs, and

those are costs that do not vary by the level of activity.

So for example, if you're not the owner of the hotel property,

the rent might be an example of a fixed cost, cost that stay the same

regardless of whether you rent, or you don't rent the additional room.

Two important other concepts are those of contribution or contribution margin.

First of all, there is a unit contribution margin,

which we'll denominate CM over here, which is fundamentally the difference

between the unit price minus the variable cost of the good sold.

And the other one is a total contribution margin,

which is the number of units that you have sold times the unit contribution margin.

These two concepts are very important to what's going to come next.

Now that we have understood the three kinds of cost and contribution margins,

let's try to understand what the break-even point is.

Oftentimes, a measure of the level of profitability of a company can be

expressed as the difference between the total contribution margin and

the fixed costs.

In order to illustrate that, lets see how this applies and

how to estimate the break-even point.

[MUSIC]

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