http://jtonedm.com/2008/07/07/heres-why-decisions-matter-to-the-8-ps-of-marketing/ James Taylor on Enterprise Decision Management Mon, 01 Dec 2008 20:09:41 +0000 http://wordpress.org/?v=2.6.3 http://jtonedm.com/2008/07/07/heres-why-decisions-matter-to-the-8-ps-of-marketing/#comment-10529 Per Sjofors Tue, 08 Jul 2008 14:26:59 +0000 http://jtonedm.com/?p=287#comment-10529  James,  Thanks for shining the light on the most ignored of the 4 P's, Pricing. Pricing is becoming more dynamic, and the various price optimization software packages available from the dozen or so vendors can help some companies with their pricing challenges.  But price optimization software is not for every enterprise; these packages require vast amounts of transactions to be effective, so unless your company is in the Fortune 500 AND the goods you are selling are relativity cheap, they are not for you.     For other companies, a process called Value Optimized Pricing typically yields a 10 - 20% increase in revenues. How can this be? A VOP enables companies to price their product to meet the true value perceptions of their customers.  Well, all companies tries this, but the information base for the price decisions are typically really poor - instead of statistically significant data from their marketplace, most companies rely on personal opinions. Personal opinions from a few sales people who wants cheaper prices because that makes their life easier; personal opinions from the finance dept who wants higher price and higher profit margins; personal opinions from a few marketing people with a "gut feel" (also called wild guess) for what the market will bear; personal opinions from a few executives with "industry experience" (also called educated guess).  All in all, not a very scientific way to price, and no wonder that a using the right process, and the right decision support for pricing, yield substantial gains.   Per Sjofors Founder, CEO  Atenga Inc www.atenga.com   James, 
Thanks for shining the light on the most ignored of the 4 P’s, Pricing. Pricing is becoming more dynamic, and the various price optimization software packages available from the dozen or so vendors can help some companies with their pricing challenges.  But price optimization software is not for every enterprise; these packages require vast amounts of transactions to be effective, so unless your company is in the Fortune 500 AND the goods you are selling are relativity cheap, they are not for you.  
 
For other companies, a process called Value Optimized Pricing typically yields a 10 - 20% increase in revenues. How can this be? A VOP enables companies to price their product to meet the true value perceptions of their customers.  Well, all companies tries this, but the information base for the price decisions are typically really poor - instead of statistically significant data from their marketplace, most companies rely on personal opinions. Personal opinions from a few sales people who wants cheaper prices because that makes their life easier; personal opinions from the finance dept who wants higher price and higher profit margins; personal opinions from a few marketing people with a “gut feel” (also called wild guess) for what the market will bear; personal opinions from a few executives with “industry experience” (also called educated guess).  All in all, not a very scientific way to price, and no wonder that a using the right process, and the right decision support for pricing, yield substantial gains.
 
Per Sjofors
Founder, CEO 
Atenga Inc
http://www.atenga.com 

]]>