Pricing as a Strategic Capability Marketing Strategy Analysis & Solution

Marketing & Sales Case Study Analysis and Solution

At Fern Fort University, we use Harvard Business Review (HBR) marketing principles and framework to analyze Pricing as a Strategic Capability case study. Pricing as a Strategic Capability is a Harvard Business Review case study written by Shantanu Dutta, Mark Bergen, Daniel Levy, Mark Ritsonfor the students of Sales & Marketing. The case study also include other relevant topics and learning material on – Marketing, Pricing

Strategic Marketing Analysis of Pricing as a Strategic Capability case study written by Shantanu Dutta, Mark Bergen, Daniel Levy, Mark Ritson will comprise following sections –

  • Pricing as a Strategic Capability Case Description
  • Marketing Definition
  • Market Potential Analysis of Pricing as a Strategic Capability
  • Market Share Potential Analysis
  • Segmentation and Segment Attractiveness Analysis
  • Competition and Competitiveness Analysis of Pricing as a Strategic Capability
  • Customer Value Analysis of Pricing as a Strategic Capability case study

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Pricing as a Strategic Capability Marketing Case Description

Sales & Marketing Case Study | Authors :: Shantanu Dutta, Mark Bergen, Daniel Levy, Mark Ritson

This is an MIT Sloan Management Review article. For too long, people have made unwarranted but detrimental assumptions about pricing. Changing prices, for example, has been looked on as an easy, quick, and reversible process, and new technologies have only reinforced that way of thinking. Similarly, extracting value from a product by pricing it correctly has been seen as relatively uncomplicated; the hard part is creating the valuable product in the first place. But these dismissive attitudes toward pricing miss the mark. Pricing is complex, and it's only growing more so as new tools and techniques become available. The ability to set the right price at the right time, any time--the very definition of a pricing capability--is also becoming increasingly important. In fact, in the course of working with dozens of companies in the past couple of years, the authors have spoken with several executives who believe that developing a pricing capability is essential to their business' survival. And they are backing up their views by investing in three areas: human capital, systems capital, and social capital. The authors explain the nature of these investments and how they come together to form a pricing capability that competitors will have a hard time imitating. Building such a capability requires an effort that some companies may not be in a position to undertake. Those that do take a comprehensive approach, however, can make superior pricing decisions that fit with their positioning, customers, suppliers, and evolving market conditions for years to come.

Marketing, Pricing

Marketing Definition

According to American Marketing Association – Marketing is a set of activities that a firm undertakes for creating, communicating, delivering, & exchanging offerings that have value for customers, clients, partners, and society at large.

Kotler explains - Marketing is a process by which organizations can create value for its potential and current customers and build strong customer relationships in order to capture value in return.

Market Potential Analysis of Pricing as a Strategic Capability

Market potential analysis comprises evaluating the overall market size of the related product that the firm is planning to launch. This will involve defining – Why the target market segment needs the product and how it will provide a solution to full its consumers’ needs. Market potential of Pricing as a Strategic Capability products various on factors such as –

  • Maturity of the market. In mature markets the profitability is often stable but the market potential is less as most of the players have already taken market share based on the segment they are serving. New players have to go for market share strategies in marketing.
  • Technological competence of the existing players and culture of innovation and development in the industry.
  • Untapped market sizes and barriers to both enter the market and serving the customers. Often companies can easily see the unfulfilled needs in the markets but they are difficult to serve as there are costly barriers.
  • Define the core need that your product is serving and list out all the direct and indirect competitors in the market place. This will help not only in positioning of the product but also in defining or creating a segment better.
  • Uncovering the current and untapped market sizes and barriers to serving the larger market. Analyze the areas that you need to sort out while launching the products to wider market and what are the challenges the firm will face in market place.
  • Estimate the current stage in product life cycle and its implications for marketing decisions for the product.

Market Share Potential Analysis

  • Understanding the buyer behavior model for Pricing as a Strategic Capabilityindustry.
  • Identifying the market share drivers relevant to Pricing as a Strategic Capability market.
  • Segment Attractiveness Analysis – Our analysis will work out which are the most attractive segments and which are the one the firm should go ahead and target. We point out in great detail which segments will be most lucrative for the company to enter.
  • Understanding the different needs and relative value of your offering by segment.
  • Developing segment priorities and positioning the product based on the product need fit developed by the firm.

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Competition & Competitive Position Analysis

  • Uncovering customer-based competitive positions for key rivals and firm’s offering. This will not only help in assessing the strengths and weaknesses of the competitors but also help in defining and positioning of the product.
  • Developing a positioning and launching strategy. It will require not only distribution channel analysis but also promotion mix for the product.
  • Strategic Marketing Planning — the process of developing and maintaining a strategic fit between the organization’s objectives and capabilities and the ever evolving marketing opportunities for its products.

Pricing as a Strategic Capability - Customer Value Analysis

Capturing customer value is essential to marketing efforts as it results in higher return in the form of both current & future sales, greater market share, and higher profits. By creating superior customer value, the organization can create highly satisfied customers who stay loyal and buy more. This, in turn, means greater long-run returns for the firm.

  • The crucial role of customer perceived value in acquiring and retaining profitable customers. Product differentiation is often based on building on a value niche that a firm believes that is very important to the customer. This niche contributes to perceived value. If the perceived value is high then customer stay loyal to the product if not then she can switch to the competitor’s product.
  • Graphically displaying value differences for deeper understanding and better internal communication. This helps is building a narrative that a customer can identify with. The better the insight more are the chances of connecting with the potential customers.
  • Identifying and selecting actionable value creation options. This can help in increasing the customer lifetime value. Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage.

NOTE: Every marketing case study solution varies based on the details and data provided in the case. We write unique marketing strategy case solution for each HBR case study with no plagiarism. The specific case dictate the exact format for the case study analysis.

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