MIDAS (Group 3)

PRICING
CONCEPTS
Aligning Price with Value
MADFUND_V24 Presented by
PRICING CONCEPTS MIDAS (Group 3)
 MIDAS (Group 3)
OVERVIEW
Significance of pricing
Aligning pricing with company
mission-vision
Understanding Price Sensitivity
and Behavioral Dimensions
Comprehensive Pricing
Consideration Framework
Strategic Objectives of Pricing
The 6-Step Pricing Procedure
Diving Deep into pricing methods
The Interlink between
Product and Price in the 4Ps
Case Studeies: Real-World
Applications of Pricing
Strategies
MIDAS (Group 3)
PRICING CONCEPTS

WHAT IS PRICING?

MADFUND - PRICING CONCEPTS

 MIDAS (Group 3)

Significance
of Pricing
Direct impact on revenue
generation and profitability
Reflecting the perceived
value of products/services
Positioning the brand in the
competitive landscape.
MIDAS (Group 3)

Aligning Pricing
with Company
Mission-Vision
How pricing reflects the company's
values and long-term vision.
Ensuring price consistency with the
promised value and product definition.
 MIDAS (Group 3)

Understanding Price
Sensitivity and Behavioral
Dimensions
The psychology of price: What drives
value perception?
Psychological Pricing
Emotional and Rational Drivers
Behavioral economics insights into
price sensitivity.
Price Sensitivity
Behavioral Economics
MIDAS (Group 3)

Comprehensive Pricing
Consideration Framework
Identity and uniqueness of goods/services.
Defining Identity
Differentiation
Competitive pricing analysis.
Market Comparison
Positioning
Target audience and their willingness to pay.
Demographic Analysis
Willingness to pay
Total cost of production.
Cost Analysis
Pricing to cover costs
External market and economic factors.
Market Dynamics
Adaptability
 MIDAS (Group 3)
STRATEGIC
OBJECTIVES OF
01
Ensuring
02 PRICING
Fostering growth
sustainability and
and expansion
survival

03 04
Gaining or Premium pricing for
maintaining market innovative offerings
share
 MIDAS (Group 3)

THE 6-STEP Setting clear pricing objectives

Objectives Definition
Alignment

PRICING Determining demand dynamics

Demand Analysis
Elasticity

PROCEDURE Estimating cost structures

Cost Structure Analysis
Impact on Pricing

Competitive Analysis
Analyzing competitors’ pricing
Benchmarking

Selecting the appropriate pricing Pricing Method Options

method Selection Criteria

Deciding on a robust price Strategy Development

strategy Implementation
 MIDAS (Group 3) DIVING DEEP INTO
COST-ORIENTED PRICING PRICING METHODS
Cost-plus pricing.
Definition: Setting the price by adding a fixed markup to the total cost of production.
Application: Discussing scenarios where cost-plus pricing is appropriate.
Markup pricing.
Definition: Setting the price by adding a percentage markup to the unit cost.
Application: Discussing the benefits and drawbacks of markup pricing.

MARKET-ORIENTED PRICING
Value-based pricing.
A
Definition: Setting prices based on the perceived value of the product or service to the customer.
Application: Discussing how value-based pricing can be used to reflect the benefits and features of a
product.
Differential or segmented pricing.
Definition: Charging different prices to different segments of the market.
Application: Discussing how differential pricing can be used to maximize revenue from different market
segments.
 MIDAS (Group 3)

1 Product as the core value

proposition
THE INTERLINK
Value Proposition: Product serves as the core value
proposition, meeting customer needs and solving
BETWEEN
their problems.
Product Features and Benefits: Features and
PRODUCT AND
benefits of a product form the basis for its pricing..
PRICE IN THE 4PS
Price as the revenue
2 generator among the 4Ps 3 Synchronizing product value with price to
enhance customer satisfaction and loyalty

Revenue Generation: Price is the sole revenue generator
among the 4Ps, and its critical role in covering costs and
generating profit.
Price's Role in Marketing Mix: Price interacts with
product, place, and promotion to create a coherent
marketing strategy..
Price-Value Alignment: It is important to align the price with
the perceived value of the product to meet customer
expectations.
Building Loyalty: A fair price-value equation can enhance
customer satisfaction, foster trust, and build loyalty over time.
 MIDAS (Group 3)

REAL-WORLD APPLICATIONS OF
PRICING STRATEGIES

APPLE INC. AMAZON INC. TESLA INC.

Premium Pricing: Apple’s premium
Competitive Pricing: Amazon's
Value-based Pricing: Tesla's value-
pricing strategy aligns with its based pricing strategy reflects the
competitive pricing strategy aims to
mission of delivering high-quality, innovative and environmentally-
provide value for money to
innovative products and how it friendly value proposition of its
customers, aligning with its
positions itself as a luxury brand in electric vehicles.
customer-centric vision.
the market. Brand Alignment: Tesla’s pricing
Market Positioning: Amazon’s
Customer Loyalty: Apple has built aligns with its mission to accelerate
pricing strategy has helped to
loyalty and trust among its customer
position itself as a go-to the world’s transition to sustainable
base through a consistent price-
marketplace for affordable goods. energy.
value equation.
MIDAS (Group 3)
PRICING CONCEPTS

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MADFUND - PRICING CONCEPTS