The EPP is proud to present the first Nordic Chapter Workshop

Value based pricing in your company - 7th of May, Lund University Sweden

With an interactive format combining real-life case studies and informal debates this first open workshop is created to give you the inside knowledge and industry insights you need in order to benchmark your pricing strategies, maintain critical competitive advantage and ensure maximum value. This workshop on how to create and maintain value based pricing will share pricing challenges you face today !

This workshop will bring together leaders and practitioners across all industries to discuss the latest developments in pricing across Scandinavia. Whether you are new to pricing or an experienced professional, this event is designed to give you the best practices, industry trends and strategic pricing skills that many other large organizations have successfully accomplished.

Event description :

In four interactive presentation our speakers will try to give you insights in value based pricing and how to make this "stick" in your organization. Pricing is one of the most powerful - yet underutilized - strategies available to businesses. This workshop will feature cutting edge presentations from top-organizations such as: Navetti AB, Honda Nordic, Alfa Laval Corporate. Our moderator for the day is the general manager pricing from Wärtsilä Services. All of our speakers are enthusiastic in sharing their pricing know-how and best practices with you!

The Chapter Board in the Nordic is currently represented by professionals from: Navetti Consulting AB, Wärtsilä Services, Alfa Laval Corporate AB, Honda Nordic, the Lund University and Novozymes.

For more information on this open workshop see our website.


Essential skills for maximizing your business strategy

Getting added value from conjoint analysis

The added value of conjoint analysis lies in the fact that values that aren’t measured can also be predicted. This is generally achieved by linking the values that one wants to measure in a linear fashion. Even though this normal adaptation of conjoint analysis has its advantages, conjoint remains a flawed tool because it simply ignores the fact that price assessment follows a step-by-step model rather than a linear pattern.

An important correction of the analysis is achieved by including the consumer’s not-so-rational decision-making process. Prices that are optimized on the basis of the consumer as homo oeconomicus will therefore mean that the conjoint analysis (in its normal adaptation) will not have a very major impact. The validity will be greatly increased if the analysis incorporates the irrationality associated with decisions made by consumers plus a more in-depth analysis of the psychological side of decision-making. (Dr. Bauer, Vocatus AG, 2006-2011)

To get more in-depth knowledge of this process, the European Pricing Platform is organizing a Master Class training on the Pricing Toolbox, given by Dr. Bauer on the 9th and 10th of May in Hamburg. In this training Dr. Bauer will introduce his expert view of the ‘Psychological Price Profile’ and take you into the world of financial risk-taking, rational decision-making, and how to set prices accordingly. This means gearing your pricing strategy towards existing consumer types that are based upon pricing psychology. By focusing on how to adapt existing tools that are dealt with during the training (such as BPTO and conjoint analysis), Dr. Bauer will show you how to get the best of both worlds. During the course of this two-day training, he will transfer his insights to the participants’ own pricing issues so that they can maximize their own organization’s business strategy.

Articles of Dr. Bauer can be found online at: http://www.vocatus.com/publications/feedback.php.
For more information on this training please visit: http://www.pricingplatform.eu/site/public/trainings_detail.asp?id=126.


Are you being creative in improving your profits?

The Practical Power of Pricing in Promoting Profit

Personal and concrete reflections by ANDERS REHNBERG

February 15, 2012

The State of Creativity

A one per cent Price increase means a 12% Profit improvement

Price as a lever for increased profits has been well understood by many top-level executives in the industry for a long time but it still amazes me how often I can surprise senior managers by showing scenarios in spread sheets that outline the impact of even modest price movements on their company’s profits.

There is a wide-spread lack of activity and creativity in the area of Price in most companies, even though this is an area where they could ‘carve gold with a small knife’ as we say in my native Sweden.

I have been preaching ‘creative pricing’ (not a relative of ‘creative bookkeeping’) for over 20 years and I cannot really say that the overall understanding of Price in the industry has improved much at operative levels, except in companies I have worked with naturally.

The same company executives who would never turn down a technical challenge to improve their Network Equipment or stream-line their Preventive Maintenance Service will say it is impossible when asked to find a way to increase prices in the Market.

The creativity goes out the window when confronted with Price.

Real life Story: 15% Price Increase of a Commodity without Volume Loss

When I took over a small (60 people) UK manufacturing operation many years ago, trading in window blinds, I was faced with the immediate problem of depressed pricing. I needed to quickly find a way to improve overall price levels, but with a fairly standard product and 1055 competitors (according to listings in Yellow Pages) it seemed difficult – unless you knew how to apply commercial creativity!

I correctly estimated that my customers (blind shops in the London area in the early 90´s) were less used to metric measurements, seeing that all the price lists and documentation in this industry was done in imperial measurements by tradition , furthermore I specifically noted that the "centimeter" was the least known metric measurement. Therefore I updated all the companies´ pricelists, showing ‘width’, ‘drop’ and ‘price’, in a nice new glossy format; showing all the measurements in centimeters AND increasing prices by 15%!

The change in usage of measurements lead to several complaints from blind shops, no complaints were heard about the increased prices. The public, who was being recommended the blinds by the blind shops were not price-sensitive, therefore the company did not lose any sales due to my price move. Needless to say it did wonders for my profits.

Fear of Failing

As an Applied Physicist by training I was used to being scientifically creative, over the years I have found that this skill can be applied equally well to commercial problems – the same brain cells are being used.

Another aspect of Pricing is the fear of losing volume, “but if we increase our prices then customers will go elsewhere” is a common heard worry. This is notwithstanding the proof that I am able to show, that in most cases the volume loss they would have to suffer would have to be enormous to reduce profits ("you can lose up to 1/3 of your volume when you increase prices by 10%").

On the brink of bankruptcy this this fear can be overcome.

Curious how creativity works in practice: read the case study from this Expert White Paper
Link under Price Management.