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Value Pricing Reflection

Student: My Linh Nguyen – Class B

Major Marketing 2 is coming to an end with the final input session Value Pricing of
Mr. Thomas Helbling. After the session, I found out my own interest in Value Pricing and
had direction for my career path in the future.


Before starting the class, I didn’t have knowledge about value pricing
systematically and specifically. I only understood that choosing price for the product
played an important role for the business because it directly affected the sales of the
product, positively or negatively. If the product was underpricing, which meant it was
valued below the current value of the product, the company might suffer losing revenue.
In another aspect, if the product was overpricing by being valued higher than its present
value, its target customer might not be able to purchase the product, also resulting in loss
of revenue.

Besides, from documents that Mr. Helbling required us to read through, I also
gained understanding about the sensitivity of customers toward the change of price and
the way they would like the price to change (small price increase rather than sudden and
sharp increase, etc…). Moreover, after understanding about steps of setting pricing
policy, I found the knowledge of this field interesting to discover. I realized that there were
various of pricing strategies being applied in the market, for example: One price policy;
Flexible price policy; Prestige pricing; Odd/ Even pricing…. Therefore, it’s important to
understand customers as well as the market to choose the appropriate pricing strategies
for the product.


At the beginning of the session, the first thing I learned about Value Pricing was 4
factors to determine the price of a product, which were: Value; Strategy; Competition; and
Cost. After that, a process of price setting was formed, including 3 steps:

1. Define Price Window

2. Set Initial Price
3. Communicate Prices to Market

Then we practiced with the Bachler case and came up with questions for this company to
determine the price for the product.
Continually, we learned about the role of Value in Pricing in economic and psychologic
aspect. I felt sometimes we were willing to pay this product higher than the other without
any specific reason. It was the power of the brand or our own mind controlled our buying
behavior. From then, I thought conjoint analysis was an effective way to determine how
people value different attributes of a product or service.

At the end of the class, we found out steps of Value Quantification and calculated Value
in Used in an exercise:

1. Understand the Key value drivers for customers

2. Calculate customer value (monetary value)
3. Communicate Value to Customers
4. Develop Ways to Capture Customer Value

In my point of view, this is the part I find most important among topics being mentioned
on the class. By setting appropriate price and effectively communicate value to
customers, the company can maintain its sales and image generally.

In the second class of the session, we had a company visit in Georg Fischer AG
to have an insight of a B2B-Company, at the same time understand the importance of
adaptation of the Digitalization in Industrie 4.0. After all the presentations of GF’s
employees about the company’s operation, the way they did marketing digitally and
applied marketing tools to the business, I realized that in reality, in each situation a
company could solve the problem in different ways, and sometimes it was completely
different from what we learned at school. From the final presentation of GF about
digitalization, I saw that they also used several models of analysis which were the same
as what we used to learn in the class, but in different function. Therefore, it can be said
that knowledge is only valuable when it steps outside from the book and come to real life.

At the end of this class, we continued with analyzing the Bachler case and calculated the
monetary value of NESSy comparing with Snowpro2. After solving the exercise, I was
surprised when NESSy was much cheaper and brought more benefit to customers,
however didn’t gain success in return. After finding out problems that Bachler could stuck
into, we realized that in root, although the company was innovative and productive in
technology, the brand trust was not high. Therefore, customers didn’t usually take risk to
choose Bachler instead of other competitors. In the past, I never thought about how brand
trust can negatively affect to the sales and image of the whole company. Therefore, I felt
with good performance and cheap price like NESSy, there was no reason for it to be fail
in net sales. Finally, we discussed about what Bachler could do in this situation.

In the final class, we started with four elements of price perception, which are:

 Proportional Price Evaluations

 Perceived Fairness
 Gain-loss Framing
 Reference Prices

We focused deeply on the Reference Price and discussed how it affected to others
perception. Continually, we learned about techniques for measuring price sensitivity, the
pros and cons of each:

 One-line pricing
 Aided open line pricing
 Van Westerndorp method

As Mr. Helbling stated out, willingness to pay could be measured in many ways, one of
those was doing survey directly or indirectly. Nevertheless, I also found out there were
still many drawbacks of these techniques. In my opinion, customers never know what
they want until we state out the needs for them. Therefore, when being asked directly
about the price, they can be exaggerated in their answers, which we never expect. In
another aspect, doing survey indirectly, although can help us get the accurate result, will
take companies time and money to conduct.

Continually, the class moved on to the methods of increasing or decreasing the price as
well as how to manage it. It was also one of the parts that I found most interesting. Before
the session, I had the mindset that: If I could set the price, I would make the product
overpriced a bit therefore I could still gain profit during the promotions, or when I had to
decrease the price. However, after the class, I knew that it was wrong when I always
thought about decreasing the price. In fact, increasing the price is far easier than
decreasing it. And decreasing the price is the last choice a company want to choose.
Moreover, I was always scared of increasing the price, I thought that customers would
leave and we had to suffer loss of revenue. Nevertheless, after Mr. Helbling made an
example of products in Migros had an increase in price but we customers never found
out, I realized that increasing price was not a big thing, the important part was how to
increase it and communicate with customers.

At the end of the class, we focused more on the Sales Training process. We understood
more about a Seller and how hard they had to work every day. In core, we turned
ourselves into a Seller and practiced steps that a Seller needed to do:

1. Ask for an appointment and preparation

2. Pre-approach by Small Talk & Conversation
3. Analyze the Needs
4. Present & Demonstrate relevant benefits
5. Overcome Objections
6. Close approaches to initiate sales closing

In each step, we practiced in pairs to see our strength, weakness and the way for
improvement. After this class, I agreed with Mr. Helbling that the position of Sales in
companies was taken to account in companies, because I never knew how much they
tried to sell products and what they had to overcome. After this topic, I appreciated more
to this career.


Reach to conclusion, the session of Value Pricing with Mr. Thomas Helbling was
interesting. Among all aspects of knowledge that I learned, the process of setting price is
what I find most helpful. In my opinion, the price is what connects all marketing activities
of a product or service. In order to set the appropriate price, company needs to
understand the customer, and sometimes use this understanding to manipulate them.
Besides, since the price of product cannot be stable all the time, it’s important to increase
or decrease the price suitably with thorough calculation, as well as the ability to innovate
or manage company’s product. And finally, the way a company communicate with
customers about the price change also plays an important part in keeping customers and
building brand trust. After the session, I discovered my interest with it and the desire of
working in this sector. Besides, I also found out that knowledge I gained from the class
could help me much with the orientation of my future career. I can be a consultant in
perspective of setting price or solving problem of a product in the future.