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Course: Mastering Value-Based Pricing

Mastering Value-Based Pricing

  • Life Time Access
  • Certificate on Completion
  • Access on Android and iOS App
  • Self-Paced
About this Course

Pricing is a very important aspect of being able to sell a product or a service. I understand this even more after I started my own business. When I started initially, the only way I used to price for our products and services was to determine the cost incurred by us and then adding a suitable margin of profit on top of that. 

However, this is not always the best way to get returns for what we have worked for. A much superior way is to Price based on the Value of what we are offering as a Product or Service.

This course discusses the nuances of Value-Based Pricing.

While we try to examine all aspects discussed in this course from general perspective, I have focused on how a small firm should approach Pricing for its Products and Services. Further, while we also discuss general Consumer Products, I have focused on Products and Services offered by one Organisation to another Organisation.

I have tried to include a lot of examples so that it becomes easy to understand the discussions. The examples are taken from real situations and thus should help understand not only the concepts; but also the various practical implications and remedies.

Basic knowledge
  • A brief knowledge of Economics will help (but not necessary)
  • A brief knowledge of Costing will help (but not necessary)
  • Some experience of doing business in any form would help (but not necessary)
What you will learn
  • Cost-Based Pricing
  • Value-Based Pricing
Curriculum
Number of Lectures: 35
Total Duration: 01:23:39
Introduction
  • Introduction to the Course  

    This is a video to welcome the participants. This video briefly introduces why this course is created and what the participants can expect from the course.

  • Course Contents  

    This video outlines the contents and structure of the course.

  • About Me  

    A brief introduction to myself in this video.

Cost-Based Pricing
  • Why do we need to learn about Pricing?  

    This video explains the importance of Pricing for a seller of Products or a provider of Services.

  • What is Cost-Based Pricing?  

    This video explains what is Cost-Based Pricing. On an macro level, we can state that when we use Cost-Based Pricing, we set the Price of a Product or Server as the sum of the Cost involved in developing the product or the Cost involved in providing a service and the Profit we would like to make from the sale of the Product or Service.

  • Example of Cost-Based Pricing  

    In this video, we walk through a complete example of Cost-Based Pricing. There are a lot of numbers discussed in this video. So, feel free to pause at any time and calculate for yourself to understand better.

  • Errata: One Omission in the Calculation of Implementation Cost  
  • Understanding Cost-Based Pricing  

    This quiz will hep understanding the importance of the concepts discussed regarding Cost-Based Pricing.

Case Study: Reliance Telecom Ltd Story
  • Introduction to Reliance Telecom Ltd  

    This video provides a short introduction to Reliance Telecom Ltd.

  • Introduction to the GPRS Billing Project  

    This video provides a short introduction to the Project with RTL being discussed in this case study.

  • Add-on: Understanding GPRS  
  • Price set by Siemens  

    This video states the Price Siemens proposed to RTL for the GPRS Billing System. One can see that this is also an example of Cost-Based Pricing.

  • The Negotiation  

    This video tells the story of how the negotiations proceeded between Siemens and RTL for the GPRS Billing System project. What needs understanding is that the Customer may not be willing to pay a Price that the Vendor wants to charge for a Product. In these situations, the Vendor needs to decide whether they would proceed with the deal or not.

  • The Initial Delivery  

    This video discusses the strategy as to how we planned the Initial Delivery of the GPRS Billing System to RTL. This video also gives a very brief introduction to the technicalities involved in making a GPRS Billing System or any Telecom Billing System for that matter.

  • Add-on: Impact of adding/changing Rating System  
  • The Impact of our Strategy  

    This video discusses the Impact of the Initial Delivery made to RTL for the GPRS Billing System.

  • Value of the GPRS Billing System to RTL  

    This video provides a rough estimate for the revenue RTL would have generated from the launch of the Data Services. It is important for Vendors to understand this as this would give them an idea of what a system provided to such Customer would mean for the Customer.

  • Reliance Story Quiz  

    This quiz helps to understand the discussed Reliance Story Case Study.

Value-Based Pricing
  • What is meant by Value-Based Pricing?  

    In this video, we define Value-Based Pricing from different perspective. We also look at an example of a Company who have implemented Value-Based Pricing.

  • What are the Pillars of Value-Based Pricing?  

    This video states the 4 pillars of Value-Based Pricing i.e. Customer Insights, Price Economics, Price Management and Pricing Psychology. In the subsequent videos, we will discuss each of these 4 pillars of Value-Based Pricing in details.

  • Errata: Special Case in Price Economics  
  • A major challenge is to find something which will be of real value to Customers  

    This video explains that we should have something unique in our Product or Service offering which will add tremendous amount of value to the Customer. Only when this is achieved, we can actually discuss a Price with the Customer based on Value.

  • Add-on: Understanding Least Cost Routing  
  • Customer Insights  

    This video discusses the aspects of Customer Insights for being able to conduct Value-Based Pricing. Knowing why the Customer wants the Product or Service are vital information in terms of determining how much to charge for the Products or Services.

  • Pricing Economics  

    In this video, we discuss Pricing Economics. We will see that quoting low prices is not a guarantee for getting higher amount of sales. Similarly, we will see that increasing price always does not result in lowering of demand.

  • Pricing Management  

    In this video, we see that Pricing Management is essentially Discount Management. We learn that Discount should always be given at a Cost to the Customer.

  • Pricing Psychology  

    This video discusses the Pricing Psychology. It is important to understand that the Customer Behaviour is dictated by the Customer's Perception of the Price.

  • Errata: Herzberg stated as Heizenberg  
  • Add-On: eTOM  
  • Understanding Value-Based Pricing  

    This quiz helps to reaffirm and consolidate the concepts and contents discussed in the lectures in this section.

A few Techniques for Selling
  • Create separate Product Versions for Value-Takers and Price-Takers  

    This video discusses why we must create separate versions/brand for Price-Seekers and Value-Seekers.

  • Always start selling from the highest option  

    This video discusses why we should start selling from the highest option and coming down to the lower options and each step we must explain to the Customer what he/she will loose.

  • Never give a Discount for Free  

    This video reiterates and reemphasises that Discounts should never be given for FREE.

  • Always gather a fair idea of what the Product or Service means for the Customer  

    This video discusses why it is important to understand what the Customer wants. Value can be created only if we have clear idea of the Customer Needs. And only when Value is created, can we charge for that.

  • Always create a higher Product Option for the Product Option you want to sell  

    This video discusses the technique that we must create a higher product option for the target product option we want to sell the most.

Closing Note
  • Course Summary  

    This video summarises what we have discussed in this course.

  • Next Steps  

    This video indicates a few possible next steps the Student could consider.

  • Thank You  
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