Price and Pricing : The Ultimate Selling Objection?

T.Y.Ko

Price – the ultimate sales objection?

Dr says…..• I have cheaper alternatives..• My patient can’t afford it• Your price is too high…….• I will switch to generic the moment

you increase price!

What actually your customer mean?

Price – the ultimate sales objection?

Salesperson says…..• If only my product cheaper than

competitors…• If only it is cheaper, I can get more

sales…• If only it is cheaper, I can have more

customers…

Being as a Sales Person

• How do you feel?• Are you happy?• Do you satisfied, proud of your job?• Do you enjoy your job?• Do you see your job as value

adding/creating?• Are you making a difference in your life,

your family, society & the environment?

Price – the ultimate sales objection?

• Scenario 1 – sell cheaper– Can it helps you to achieve your sales target?– Can it helps you to sell easier? Samples?– How much cheaper? – At 50% price reduction, how much do you

think you can sell more?

Price – the ultimate sales objection?

• Scenario 2 – sell at premium price– Can it helps you to achieve your sales target?– Can it helps you to sell easier? Samples?– At 10% price increase –would be more difficult

to sell?

Price

• Is price your selling tool? • Or marketing tool?

Price

Major considerations in setting price

Product costs

Competitors’ prices and other external and internal factors

Consumer perceptions

of value

No possible demand at this price

No possible profit at this price

Low price High price

Price

Factors affecting price decisions

Internal factors: Marketing objectives Marketing-mix strategy Costs Organizational

considerations

Pricingdecisions

External factors: Nature of the market

and demand Competition Other environmental

factors (economy,resellers, government)

PricingProduct Adjustment Strategies

Strategy Description

Discount & allowance Reducing prices to reward customers’ response

Segmented pricing For difference customers, products or locations

Psychological pricing Adjusting prices for psychological effect

Promotional pricing Short term price reduction to increase sales

Value pricing Right combination of quality, service at a fair price

Geographical pricing Factor in geographical location

Marketing mix

The 4 P’s of MarketingProductProduct varietyQualityDesignFeaturesBrand namePackagingSizesServicesWarrantiesReturns

PriceList priceDiscountsAllowancesPayment periodCredit terms

PlaceChannelsCoverageAssortmentsLocationsInventoryTransportationLogistics

PromotionAdvertisingPersonal sellingSales promotionPublic relations

Targetcustomers

Intendedpositioning

Positioning

Who is your

target market?

Can cheaper price

makes everyone

to buy?

Price – The Ultimate Question

How can we provide more value for money

products (more value than our competitors’ are selling) to

our customers?

Marketing is not the art of finding clever ways to dispose of what you make. It is the art of creating genuine customer value

Philip Kotler

What is value?

Adding Value (4 Ps & 1B)• People - Rapport? Friendships? Dr’s window to

the world? Solution provider?• Promotion - CME activities? Patients educational

tools? Patients support? Help to keep the patients?

• Product – Positioning? Clinical Benefits?• Place – Service?• Built the Brand!

Are the 4 Ps & B able to add value / match to the Pricing structure of your product?

Branding is the key to halt price deterioration and sustain

profitability!

“ An orange is an orange…is an orange. Unless …that orange happens to be Sunkist, a name 80 percent of consumers know and trust.”

Russell Hanlin, CEO of Sunkist Growers.

“ All our factories and facilities could burn down tomorrow but you’d hardly touch the value of the company”

Roberto Goizueta,Late CEO of Coca Cola

How are brands built?

through the orchestration of a variety of tools over time consistently such as advertising,public relations, sponsorships,events,social causes, clubs, spokespersons and the front liners!

Philip Kotler

Advertising vs Personal SellingBrand Advertising Sales

ForceSeeding

trialsCME talks

Gimmicks

Unawareness

Awareness

Interest

Evaluation

Trial

Usage

Repeat Usage

How to justify price increase?

• Inflation?• Highlight product USP!• Add bonus?• Offer CME activities?• External factors?• Use Emotional Softener – Who?• Provide patients educational / support

tools?

Price and Pricing

Which one you prefer?

Higher Pricing or Cheap Price??

Pricing Integrity

• Is your pricing consistent or lack of it?• Does it build trust and long term

relationship with your customers?• Would the pricing leads your customers

into being your advocates or vice versa?

Pricing is the second most explicit form of company positioning, image & reputation!

What is our pricing policy?• Cost-based Pricing (reactive)

Product Cost Price Customers

• Market-based Pricing (reactive)

Competitors Position Price Cost Product

• Value-based Pricing (proactive)

Customers Value Price Cost Product

What your customers really want?

• Cheaper price?

Or• Better Margin?• Reliability & Predictibility? ( Quality & Branding)• Patients keep coming back?

Why? • Dr charged cheaper price than Rx?• Pt satisfied with tx?• Pt satisfied with dr?

Marketing is not the art of finding clever ways to dispose of what you make. It is the art of creating genuine customer value

Philip Kotler

What customers really need?

“1% improvement in price yields bigger gains in operating profit than a similar improvement in variable costs, fixed costs or volumes – almost 8% on average across the S & P 1000”

McKinsey Quarterly Update 2000 (marketing)

Preventive Medicine

• “If you think health and wellness is expensive, try illness”

• “If you think medications for diabetes/ hypertension/cholesterol are costly, try blindness, dialysis, amputation, stroke and heart attack”

Is this Value-adding?

Thank You