1 © 1993-2004 Pragmatic Marketing, Inc. All rights reserved. Product Management Best Practices Know...
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1 © 1993-2004 Pragmatic Marketing, Inc. All rights reserved. Product Management Best Practices Know What You Need to Know to Price Your Products Barbara Nelson, Pragmatic Marketing [email protected]
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Transcript of 1 © 1993-2004 Pragmatic Marketing, Inc. All rights reserved. Product Management Best Practices Know...
1© 1993-2004 Pragmatic Marketing, Inc. All rights reserved.
Product Management Best Practices Know What You Need to Know to Price Your Products
Barbara Nelson, Pragmatic Marketing
Barbara Nelson
Please print using Pure Black/White.
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About Pragmatic Marketing, Inc.
We are recognized experts in technology product management and product marketing
We specialize in training and consulting Since 1993, we have trained over 25,000 people
at thousands of companies Pragmatic Marketing certification program
available
3
Questions about pricing
How much should we charge? What pricing models should we use?
Module User
Frequent versus casual Server Usage Subscription Regional Specials
How can we overcome sales channel issues? Product announced before pricing is finalized Price objections Heavy discounting Sales channel is confused Customer is confused
4
The answer to most of your questions is not in the
building
5
Back to basics - the four P’s
Price
Product
Promotion
Placement
6
The new P’s
Product Management
Development & Services
Marketing Communications
Sales Channel
Who owns this?
Price
Problem
Product
Promo
Place
7
If product managers don’t do their jobs, the
other departments will fill the void.
8
Internet refrigerator
9
Pricing
Buy, Build or Partner
Operational Metrics
BusinessCase
SalesProcess
Thought Leaders
Market Requirements
MarketSizing
MarketingPlan
Product Roadmap
Awareness Plan
Market Research
Market Problems
Distinctive Competence
Product Performance
Customer Acquisition
Positioning
Customer Retention
LaunchPlan
Product Contract
Innovation
Market Messages
Channel Training
Win/Loss Analysis
Competitive Write-Up
EventSupport
Collateral & Sales Tools
Presentations & Demos
WhitePapers
User Personas
“Special”Calls
Release Milestones
AnswerDesk
Technology Assessment
Competitive Analysis
Lead Generation
Buyer Personas
Pragmatic Marketing® Framework
A market-driven model for managing
and marketing technology products
Market Analysis
Product Strategy
Program Strategy
Product Planning
Quantitative Analysis
Channel Support
SalesReadiness
Str
ate
gic Ta
ctic
al
10
Competitive Write-Up
Collateral & Sales Tools
Presentations & Demos
WhitePapers
AnswerDesk
Channel Training
EventSupport
“Special”Calls
Typical approach
Market Analysis
Product Strategy
Program Strategy
Product Planning
Quantitative Analysis
Channel Support
SalesReadiness
Str
ate
gic Ta
ctic
al
Pricing
Buy, Build or Partner
Operational Metrics
BusinessCase
SalesProcess
Thought Leaders
Market Requirements
MarketSizing
MarketingPlan
Product Roadmap
Awareness Plan
Market Research
Market Problems
Distinctive Competence
Product Performance
Customer Acquisition
Positioning
Customer Retention
LaunchPlan
Product Contract
Innovation
Market Messages
Win/Loss Analysis
User Personas
Release Milestones
Technology Assessment
Competitive Analysis
Lead Generation
Buyer Personas
Pricing
Product Roadmap
Operational Metrics
Lead Generation
Competitive Analysis
Release Milestones
Pricing
Buy, Build or Partner
Operational Metrics
BusinessCase
SalesProcess
Thought Leaders
Market Requirements
MarketSizing
MarketingPlan
Product Roadmap
Awareness Plan
Market Research
Market Problems
Distinctive Competence
Product Performance
Customer Acquisition
Positioning
Customer Retention
LaunchPlan
Product Contract
Innovation
Market Messages
Channel Training
Win/Loss Analysis
Competitive Write-Up
EventSupport
Collateral & Sales Tools
Presentations & Demos
WhitePapers
User Personas
“Special”Calls
Release Milestones
AnswerDesk
Technology Assessment
Competitive Analysis
Lead Generation
Buyer Personas
Market Analysis
Product Strategy
Program Strategy
Product Planning
Quantitative Analysis
Channel Support
SalesReadiness
Str
ate
gic Ta
ctic
al
Typical approach
“ ”11
Kristen Lippincott, Curator, National Maritime Museum, Greenwich, England
There's a difference between being busy and being productive.
12
BusinessCase
Market Problems
Distinctive Competence
Pricing
Buy, Build or Partner
Operational Metrics
SalesProcess
Thought Leaders
Market Requirements
MarketSizing
MarketingPlan
Product Roadmap
Awareness Plan
Market Research
Product Performance
Customer Acquisition
Positioning
Customer Retention
LaunchPlan
Product Contract
Innovation
Market Messages
Channel Training
Win/Loss Analysis
Competitive Write-Up
EventSupport
Collateral & Sales Tools
Presentations & Demos
WhitePapers
User Personas
“Special”Calls
Release Milestones
AnswerDesk
Technology Assessment
Competitive Analysis
Lead Generation
Buyer Personas
Market Analysis
Product Strategy
Program Strategy
Product Planning
Quantitative Analysis
Channel Support
SalesReadiness
Str
ate
gic Ta
ctic
al
13
PreferredApproach
Pricing
Buy, Build or Partner
Operational Metrics
BusinessCase
SalesProcess
Thought Leaders
Market Requirements
MarketSizing
MarketingPlan
Product Roadmap
Awareness Plan
Market Research
Market Problems
Distinctive Competence
Product Performance
Customer Acquisition
Positioning
Customer Retention
LaunchPlan
Product Contract
Innovation
Market Messages
Channel Training
Win/Loss Analysis
Competitive Write-Up
EventSupport
Collateral & Sales Tools
Presentations & Demos
WhitePapers
User Personas
“Special”Calls
Release Milestones
AnswerDesk
Technology Assessment
Competitive Analysis
Lead Generation
Buyer Personas
Market Analysis
Product Strategy
Program Strategy
Product Planning
Quantitative Analysis
Channel Support
SalesReadiness
Str
ate
gic Ta
ctic
al
14
Don’t price in a vacuum
Find out value to customer Quantify the value Perception of value based on price
Understand competitive landscape Price of competitors’ products Alternatives
15
Technology Product Assessment
Impact to CustomerWhat is the impact on their operations?
B D
A C
Low
High
High
Depth of Technology
Determine value of solving the customer’s problem
16
Competitive price review
Commodity price for commodity products
Premium price for distinctive competence
Use options to target different markets
C1 Base
C2 Base
Our Base
Our Premium
Contact Info
Encrypt
Backup/restore
Web access
Price $100 $100 $100 $500
17
Price/quality matrix
High
UnderpricedIdeal for
PenetrationPremier Offering
Value of Offering Real Bargain Average Overpriced
Cheap GoodsUnhappy
CustomersMake the Sale
& Run
Low High
Price Versus Competition
Source: Business Resource Software, Plan Write for Pricing, www.BRS-Inc.com
18
Price and discounts
Revenue $
Discount %
19
Price model impact
Market Customers Different segments Sales channel
Feasibility Technical Operational
20
Strategic product managers
Understand the company’s distinctive competence
Know what is possible with technology Collect and quantify market problems
Know the market better than the market knows itself Understand what the market values
Communicate market problems to the organization
…using the grid
21
The building is full of product experts.
Your company needs market experts.
22
Action Plan
Listen to the market Use the technology product assessment grid
Plot your products Plot your competitors’ products
Assess your product management skills using the Pragmatic Marketing® Framework
23
Resources
Pricing The Price Advantage, Michael V. Marn, Eric V. Roegner,
Craig C. Zawada The Strategy and Tactics of Pricing, Thomas T. Nagle
SPG Insights newsletter - www.spgconsulting.com Software pricing resource
Pricing tips and newsletter - www.softwarepricing.com Business Resource Software
Plan Write for Pricing - www.brs-inc.com Product Management
www.PragmaticMarketing.com – about our seminars www.ProductMarketing.com – free resource for product
managers
