Competitor Pricing Models

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来自 University of Virginia 的课程

Market and Competition in Pricing Strategy

93 个评分

University of Virginia

Market and Competition in Pricing Strategy

93 个评分

课程 3（共 4 门，Specialization Pricing Strategy Optimization）

If you haven’t considered what the competition is charging, you may not be maximizing your revenue. Spend time analyzing the market and you can influence price and improve margins. In this course, we'll show you how to implement competitive pricing and avoid common legal pitfalls of market-based pricing. You will also learn how to predict, influence and respond to competitors’ pricing moves. Led by Darden faculty and Boston Consulting Group global pricing experts, this course provides an in-depth understanding of market-based pricing and how to use it to capture more revenue.

从本节课中

Disrupting Markets and Engaging in "Coopetition"

Disrupting competition and engaging in "coopetition" can benefit all players in the market--but not all the time. Using knowledge from game theory and pricing models can help you understand when this strategy can be beneficial. Thomas will introduce two competitor pricing models--price moves and price wars--and show you how to use these models to predict and respond to competitors. Then Ron will show you various strategies to optimize prices through the four phases of the product life cycle, from disruptive to declining products. Then you will use the SmartOps case to apply your knowledge of "coopetition" to analyze a real-world pricing decision.

Week 3 Introduction1:13

Competitor Pricing Models3:13

Competitive Price Moves: Understand Competitive Dynamics9:11

Competitive Price Moves: Assess Your Options6:15

Competitive Price Moves: Choose and Execute Best Move4:11

与讲师见面

Jean Manuel Izaret
Senior Partner and Managing Director, Leader of BCG’s Global Pricing Practice
Ronald T. Wilcox
NewMarket Corporation Professor of Business Administration & Senior Associate Dean for Degree Programs
Marketing
Thomas Kohler
Associate Director, Pricing
Marketing, Sales & Pricing Practice

Next I cover with you, competitor pricing models.

Before we really go into the depths of it,

let's first discuss when do competitor pricing models really matter.

What are the prerequisites, or

the leading indicators on when you have to pay more attention to it.

In my experience, they're four.

It starts with the product cycle maturity,

meaning are you in an industry with immature products where

there are still frequent technological disruptions or market disruptions?

Or is it a very stable product proven technology with limited,

or at least predictable innovations?

And in that case, if you're more on the right and side of the scale

then it's clearly a candidate for the competitive pricing models.

Next is the industry concentration,

similar to the y axis of our competitive pricing frameworks.

The question here is, are there many players,

a fragmented market, possibly with low entry barriers?

Or do you have established large players with high entry barriers.

And again,

if you have few large competitors then it matters a lot how they price.

Product differentiation is our next dimension.

Here the axis goes from undifferentiated and commoditized goods,

to something completely customized.

Where competitive pricing models play a role is probably

a little bit left of the center here And,

lastly, how transparent is the pricing in the market you're operating?

Is it totally intransparent, or are the competitors' prices very visible and

transparent?

And you guessed it right.

Competitor pricings model are a lot more important if you have

a transparent market.

I want to introduce an analog around chess when it comes to competitive pricing

models.

Chess is usually seen as a great example of strategy.

There is a very obvious goal trying to set your opponent check mate.

You have to plan through every move and there's certain rules to the game.

And after every step your opponent is making a move then you have to respond to.

Very similar in pricing, you have to think ahead

of a series of moves not only yours but also the competitors.

However, the competitors might do unexpected things

they might chang even the strategy so you have to re-adjust and tune your strategy.

And lastly, there are lot of ways to win this game.

If you know how it's played.

And sometimes that's not as obvious as you might think.

There are three use cases for Competitor Pricing Models.

First one is price setting.

Here, you set the price for a new product based on the next best alternative.

We covered this example in the customer value course.

The next one are price moves where you try to actively manage your prices through

war-gaming.

We'll talk through any detailed examples after this.

And lastly, there are price wars where you try to avoid or

break the vicious circle of lowering the prices round by round.

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