By THOMAS NAGLE - JOHN HOGAN
For undergraduate creation to marketplace Pricing classes.
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Additional resources for THE STRATEGY AND TACTICS OF PRICING: PEARSON NEW INTERNATIONAL ED ITION
Treating brand as another attribute in the choice decision allows us to understand how customers might value a 36-inch Sony TV relative to a 42-inch Samsung model. Regardless of the attributes tested, the value estimates derived from a conjoint study can then be used as an input to a variety of pricing decisions. Psychological Value Estimation: An Illustration Sport Co. ” The new design has led to significant increases in distance and accuracy for both beginning and advanced players. The question facing the management team was how to set prices given that there were many different types of golfers who would be potential customers.
A business marketer of, say, an industrial grinding machine could segment customers in terms of their industries, their applications for which they use the marketer’s product, or the total value they receive from the product. A segmentation done by industry using industrial classification criteria would not indicate, however, whether customers use the grinders in similar ways. A segmentation based on application criteria would account for different ways of using the grinders, but would not indicate if the grinder is more important to one segment’s business model than to another’s.
Your secondary segmentation, therefore, will use the value driver that varies the most among the subsegments within each primary segment. The example in Exhibit 8 illustrates the process for an industry-leading commercial printing company serving catalog marketers. Catalog companies have a variety of printing needs. Some are primarily concerned with brand image and ensuring that their direct marketing integrates well with their 42 Value Creation other sales channels such as retail stores. Others have unique needs, such as the ability to tailor catalogs to particular segments of a market by varying the “signatures” (groups of printed pages) bound into different parts of the print run.
THE STRATEGY AND TACTICS OF PRICING: PEARSON NEW INTERNATIONAL ED ITION by THOMAS NAGLE - JOHN HOGAN