Monday, April 28, 2014

"Value For Money" Should Be Your New Pricing Strategy



Value For Money Pricing Strategy

In the 1930's Procter an Gamble and Kellogg's invented the value for money concept. They continue to develop their product strategies around what they consider to be the only three possible B2B or B2C behavioral market segments that exist:

  1. Effectiveness buyers want to do more with the same resources
  2. Efficiency buyers want to do the same with fewer resources
  3. Economizers want to do less with far fewer resources

In the prior economy companies matched the product lifecycle stage with a variety of company-centric pricing strategies such as skimming, penetration, customary, etc. In our new economy all buyers will be driven by one of these three behaviors on an opportunity by opportunity basis, not for all of their purchases.


In order to be ready for the different colored light that is now visible at the end of the economic tunnel, successful companies must develop the competency for
addressing the respective value-for-money behavior for each opportunity that enters their sales funnel.

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