Value-based Marketing Strategy

Pricing and Costs for Relationship Marketing

This book offers novel methods for developing Value-based marketing strategies aimed at increasing revenue and profits. The Value concept relates all the benefits offered by a product with its price and the effort required to obtain it. Global competition requires managing Value rather than individual products or brands. This fosters customer loyalty, and provides a solid basis for relationship marketing. The book takes a practical, step-by-step approach to explain:

• How the forces of supply and demand interact with customer Value;
• The relationships between benefits, quantities, prices and costs;
• How to develop effective competitive strategies;
• How to manage inventory and product mix efficiently;
• How to apply the Value model to increase profitability, and solve major marketing problems.

The book sets forth several new approaches for marketing and pricing decision-making:

• The concept of Value integrates marketing, finance, economics and accounting, in order to link Value-based pricing with relationship marketing.
• The law of supply and demand is restated with quantity as a function of Value instead of price; this makes it a more realistic and practical tool for understanding today´s highly competitive business environment.
• The confrontation and complementation concepts provide useful tools for guiding marketers into new segments, and pricing products accordingly. They play a key role for devising win-win strategies, not only with customers, but also with competitors.
• The Value Matrix is a practical tool for understanding the product´s positioning, analyzing its competition, setting prices and developing strategy. It aims at achieving an optimal balance between customer loyalty and product mix profitability.
• The Value Life Cycle illustrates how Value acts as a force that constantly changes revenue, providing insight for developing strategies in each phase of the product´s life cycle.
• Analogies with physics illustrate how policy constraints create resistance to sales velocity, thereby determining the rate at which a firm advances towards its financial and marketing goals.
• The strategy for pricing business services applies Value to balance supply with demand; this leads to increased revenue.
• The marketing approach set forth unifies product portfolio and inventory management with Value-based pricing for maximizing income.
 
Clear explanations and accessible language make this book ideal for marketing professionals and non-specialists. Advanced readers may refer to the appendices, where the subjects are analyzed further and the mathematical foundations are laid out; numerous solved problems of pricing and costs are included.