TY  - CHAP
AB  - When linked to human behavior and executed effectively, value-based pricing represents the most effective lever that a company has at its disposal to maximize profitability. The ability to integrate sophisticated analytics and market research in order to sell a customer the right product (and value) at the right price will drive profitability far more effectively and sustainably than other business initiatives (Marn & Rosiello, 1992, p. 84). This chapter addresses the use of analytics to determine where value resides and how to turn that analysis into an effective platform for pricing decisions. Organization-wide involvement in pricing is essential. A company must provide those persons responsible for pricing – including finance and sales persons – with information regarding the levers they can pull in the product transaction execution. Statistical business analytical software enables companies to apply microeconometrics (analytical and statistical capabilities) for the pricing and selling of products. The pricing waterfall helps companies understand where they can increase profits by using the pocket price and pocket margin to gain insights into which customer relationships can be more profitable than others. By examining the transaction structure, behavioral segmentation, and price optimization (three dimensions of the Analytics Triad), a company can conceive the full value proposition for groups of customers. An effective process and technology infrastructure that enables granular data development and analysis will help enable accurate and timely pricing decisions.
VL  - 19
SN  - 978-1-78052-996-7, 978-1-78052-997-4/1069-0964
DO  - 10.1108/S1069-0964(2012)0000019019
UR  - https://doi.org/10.1108/S1069-0964(2012)0000019019
AU  - Davenport Chuck
AU  - Norkus John
AU  - Simonetto Michael
ED  - Gerald E. Smith
PY  - 2012
Y1  - 2012/01/01
TI  - Capturing the Value of Pricing Analytics
T2  - Visionary Pricing: Reflections and Advances in Honor of Dan Nimer
T3  - Advances in Business Marketing and Purchasing
PB  - Emerald Group Publishing Limited
SP  - 299
EP  - 333
Y2  - 2024/05/04
ER  -