Pricing for Profitability (Course Id 2234)

Pricing is one of the most powerful ways to improve – or destroy – profits. This course can help you improve the pricing practices at your company or allow you to help your clients make better pricing decisions.

A Deloitte pricing effectiveness benchmark study found that: Companies that actively pursue pricing as an important part of their strategy typically outperform industry peers on several financial metrics… Companies that are pricing leaders are 26 percent better at managing true profitability. This course focuses on financial management and profitability analysis of pricing.

The course is comprised of three sections. Each section looks at pricing from one of three perspectives:

• Section 1 - Pricing Profitably Analysis and Processes: Internal analysis and processes
• Section 2 - Pricing Profitably for Your Product's Value: Customer perceptions and actions
• Section 3 - Pricing Profitably in the Face of Competition: Competitive pressures

I also have three video courses that cover each of these three sections if you prefer a video format.

Here’s a summary of each section of the text course:

• Pricing Profitably Analysis and Processes: I explain how to analyze pricing decisions to anticipate their profit implications. Cost-plus pricing is a popular pricing methodology, but I explain its weaknesses. I also cover how many parts of a company can work together to improve pricing.
• Pricing Profitably for Your Product's Value: Price is a function of the value provided to customers. This course focuses on customer perceptions of value and their willingness to pay for that value. You'll learn the calculation for value-based pricing. I also touch on pricing ethics.
• Pricing Profitably in the Face of Competition: The focus of this course is how other companies can impact prices. I show how to analyze the profitability at stake by responding to competitor pricing. You'll learn common pricing strategies relative to market pricing. Finally, I'll show how to identify and reduce poor discounting practices.

I show examples of calculating the changes in profitability from different pricing decisions. You’ll learn how to calculate the costs of price cannibalization. I also show how to use following analysis techniques for pricing decisions:

• Cost-volume-profit analysis
• Break-even analysis
• Sensitivity analysis
• Two-variable data tables

Course Learning Objectives

• Recall key concepts of competition-based pricing, value-based pricing, and cost-based pricing
• Identify price cannibalization
• Recognize common pricing strategies
• Recognize break-even analysis