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Deloitte Pricing Framework
The Deloitte Pricing Framework represents the six core competencies enabling an organisation to realise the full benefits that pricing can bring
- The Forgotten "P"
- Price and Profitability Analysis
- Developing the Right Price
- Sustainable Performance
Deloitte Pricing Framework
Executing defined policies and processes that govern profitable decision making on a daily operational level.
Defines a pricing framework that supports business objectives by understanding and capturing the value of an offering relative to competitive alternatives and customer demands.
Organisational Alignment & Governance
Effectively managing the people and cultural dimensions of an organisation so that it can sustain pricing excellence.
Advanced Analytics & Price Setting
Determining profit-maximizing prices for products and/or services.
Pricing Technology & Data Management
Designing and deploying pricing analytics, optimisation and execution tools to enable effective pricing decisions and, to enhance quality and consistency of pricing processes.
Tax & Regulatory Effectiveness
Proactively managing the tax, regulatory compliance and governance issues related to pricing decisions.
The Forgotten “P”
Of all the “P”s of marketing – product, price, promotion and place – price is the one that has the greatest effect on profitability.
Pricing for value requires that companies build sustainable cross-functional capabilities to effectively set and capture prices. Elements of pricing for value include: developing the optimal pricing strategy, executing effectively the pricing policies, measuring and controlling price at the transactional level and aligning technology with pricing processes.
Achieving sustainable competitive advantage through pricing does not come from setting the perfect price or from implementing technology. True advantage comes from creating balanced capabilities in strategy, execution, measurement control, and technology. Deloitte structured these capabilities within a 6-box model.
Price and Profitability Analysis
Take a look at your product portfolio. Is each product priced as high as it could be, without affecting market share? Now think about your sales force. Is anyone giving away price to close a sale?
We’ll help you examine up to two years of your transaction data in order so you can better understand your profit variation by product, customer, segment, channel and geography.
And when we’re done, you won’t just get a set of recommendations. We’ll also help you with the technology, the organization, and the tools so that you can continue to do this analysis without our help – daily, weekly, or as often as you need.
Developing the Right Price
Goods and services can be more profitable if they’re tailored to specific buyers. In order to do that, you might need to understand your buyers better.
This step illustrates the interdependency of price with another of marketing’s Ps: product. We can help you segment your buyers and align your existing and planned product portfolios with these specific market opportunities, help you understand how different prices can affect volume in each buyer segment by product, by geography, using techniques such as demand modeling and help you create regulatory constraints that are industry specific as well.
Once the parameters are established, we’ll help you develop an understanding of how to use these same techniques to develop profitable list prices and execute them in the marketplace. We can help you set up processes to identify, gather, cleanse and store data – be it transactional, financial or competitive – and then help you automate them for ease and practicality.
If your organisation is like most, pricing is a set of disparate activities going on in different parts of the business. We can help you develop the processes that connect these activities so that they function as a virtual department.
We can help you clearly define roles, responsibilities and reporting relationships, and then train people for their new roles and develop customised key performance indicators (KPIs) to facilitate good pricing decisions at all levels in the organisation.
Automation is a way to give everyone the same view of the facts, while dramatically reducing the proportion of time people spend collecting data and creating spreadsheets. Our ability to help you install technology and design and deploy pricing analytics means that your new system can be up and running faster than it would be if you worked with a technology vendor alone.