European Pricing Platform partners with Vistaar

The European Pricing Platform - the first not-for-profit knowledge sharing platform for pricing decision makers in Europe - announces partnership with Vistaar Technologies - an innovator of B2B price and revenue management solutions - as a Pricing Technology Expert. Vistaar will sponsor and co-host upcoming ePP events with the purpose of helping participants achieve corporate profit objectives by sharing best pricing practices ranging from strategy and planning to sales execution and performance management.

“The uneven nature of economic recovery across the world and especially in Europe has further highlighted the need for organizations to have flexible, market-specific pricing strategies in order to maintain strong competitive advantage in the marketplace,” said Venky Subramanian, Regional Director, EMEA, Vistaar. “We are excited about the partnership with ePP, as it will provide the opportunity for us to work collaboratively with key pricing professionals across Europe and share best practice techniques and technologies to address complex pricing issues that straddle multiple pricing structures, regulatory frameworks, countries, languages, and currencies.”

Vistaar’s solutions enable some of the world’s largest companies to develop, implement and manage sophisticated pricing strategies in simple fashion, resulting in significant margin benefits. For these companies, Vistaar’s easily configurable pricing software and Excel user-interface options facilitate collaboration across a large cross-functional set of stakeholders involved in pricing by providing science based analytics, market intelligence, and scenario planning to help them make informed and intelligent decisions. Vistaar’s customers such as AMD, Beam Global, Cisco, Ford, and GE Aviation are operating in unique business environments, have complex product portfolios, and are implementing comprehensive pricing strategies to maintain or gain market leadership in various market segments around the globe.

“Vistaar has been selected to join our group of pricing technology experts worldwide because of their proven track record, deep expertise, customer experience, and pricing science methodologies,” said Pol Vanaerde, ePP president. “We are pleased to have Vistaar included on our expert list, and look forward to working closely with them to better serve our participants.”

About European Pricing Platform

The ePP offers your company to have the right pricing tactics in place to guarantee customer loyalty and deliver sustained margin growth to your business. Enhance your pricing know-how and be successful in it by joining this dynamic and yet resourceful pricing platform.

About Vistaar Technologies, Inc.

Vistaar is an innovator of price and revenue management solutions. Vistaar’s pricing software enables companies to achieve pricing best practices through price analytics, price optimization, price list management, and deal management. Vistaar is working with companies such as AMD, Beam Global, Cisco, Ford and GE to transform pricing operations into a strategic advantage. For these companies, Vistaar pricing software drives measurable price and margin improvements that deliver profitable growth and maximum shareholder value. Vistaar’s operations include six offices across North America, Europe and South Asia.

The Price is Complicated

Pricing is not about one number. By determining your worth and building value perception around that, your pricing strategy can strengthen brand perception and differentiation.

Setting the right price points is no easy task. In today’s post-recessionary economy, product pricing is particularly tricky because consumers’ perception of value is confounding and seems to shift constantly. People will camp out overnight for the chance to buy a $499 iPad, but you can’t seem to spark any interest in a $4.99 burger combo.

You may not be able to predict how consumers will behave, but you can use pricing to your advantage. The solution lies in taking a strategic approach to pricing decisions. But even before we get into strategy, I need to challenge some conventional wisdom about setting prices.

Many chains use a cost-plus approach. That is, prices are based on food costs plus a labor charge and an overhead factor. The problem with cost-plus pricing is that it is a short-term, inside-out approach. Not only does it leave you vulnerable to variability in commodities pricing, but it also doesn’t reflect the full margin potential of your offerings. Customers may be willing to pay more for some items, but cost-plus pricing essentially treats all products the same. Pricing should be decided from the outside in.

Given Subway’s success with its $5 Footlong promotion, you may think you need to match or beat it, or find your own magic price point. But trying to find that magic number is like searching for the Holy Grail—it’s likely a fruitless and frustrating endeavor, because pricing isn’t about one number. Instead of trying to figure out the threshold that customers won’t give you permission to exceed, determine what your offering is worth and use your pricing strategy to set customers’ value perceptions accordingly.

There is no single price or pricing strategy that works for every chain. Audits and analyses of competitor’s pricing are crucial inputs to your price setting, but the point is not to simply copy other’s approaches. You should approach pricing as thoughtfully and strategically as your menu. ”I say we give up those antiquated approaches and adopt some new ways of thinking about pricing. Price should be considered a touch point through which you express your brand and customers experience it. Pricing strategy should be aligned with your brand strategy. That is, you should use your brand image and positioning to drive price decisions—and in turn, use pricing to strengthen your competitive advantage and brand differentiation. Here are some ways to set your pricing strategy.

Reinforce your brand identity. Use price to communicate what your brand stands for. For example, if your brand is about 1950s-style fast food, then price your offerings with that style. You probably can’t charge ’50s prices, but you can price your offering for an even dollar amount instead of using today’s 99-cent convention—and offer classic combos for classic prices. If your brand is about offering healthy alternatives, ensure your healthier offerings are priced lower than the more mainstream ones—and definitely don’t charge more for substituting a healthy ingredient like soy milk or fat-free cheese.

Be clear about your competitive positioning. Don’t be afraid to charge more if you’re competing on quality, exclusivity, or a superior experience. Starbucks’ recent 9 percent same-store sales increase results prove that customers are willing to pay a price premium even in this economy. On the other hand, if you’re a low-price player, keep your prices low across the board—even one or two higher-priced products can detract from your position. Consider making a claim like “everything under $1.99 every day” and don’t offer combos that add higher price points to your menuboard.

Vary price to emphasize brand differentiation and value. Variable pricing draws attention to the value you offer or to the one dimension that most meaningfully differentiates you from competitors. If your burgers are your best product, pricing them higher than other menu items communicates their uniqueness. If special fries are your most popular menu item, sell all of your products with a side of fries and set your prices accordingly.

Vary price to target customer segments. You can also use variable pricing to appeal to certain customer segments. If you want to attract families, price your offerings to favor quantities and selections appropriate for family purchases. If dine-in customers are more desirable than take-out, consider a separate menu with special prices (and perhaps special products) for them. If you want to grow your breakfast daypart, accept a lower margin for those items.

Anchor your pricing. Price anchoring uses cues to set the customer’s expectations. Those TV infomercials that claim their new gizmo is “a $50 value that’s available today for only $19.99” use price anchoring to increase the perceived value of their offering. Wegman’s grocery stores show competitors’ prices on their shelves to prove their items are competitively priced. And car dealerships don’t display that $50,000 fully loaded model only to encourage customers to add on expensive options—they also use it to make customers feel like they’re getting a deal if they walk away with a $35,000 version. You can use similar approaches to communicate the perceived value of your menu items.

Pricing is too important to be made as an arbitrary decision. And just because consumers have cut back on spending doesn’t mean pricing is simply a game of “how low can you go.” With a strategic approach, you can use price as a helpful tool in your brand-building toolbox.

Source: QSRmagazine.com - Denise Lee Yohn