strategic pricing and monetization
TRANSCRIPT
Creativity for Teachers
Strategic Pricing and MonetizationPavan SoniInnovation Evangelist and Researcher [email protected]
Topics coveredIndustry analysisCompetitive positioning Value innovation Cost- Price- Value driversBusiness model canvasPricing strategies Pricing hi-tech productsDisruptive innovations Pricing anomalies/ strategies in emerging marketsCash curve analysis Price elasticity Frugal innovation in India
Your pricing is subjected to where to are positioned!
Competitive Positioning: Why you cant be everything?Source: Porter (1980)
Porter on Competitive Strategy 5
Simultaneous pursuit of value and cost6
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Xioami- Apple of China? (Lei Jun)
The three levers9
business model shows the ways10
Pricing choices 11Business Model Generation (Osterwalder and Pigneur, 2010)
Gillette: Bait and hook business model1/22/2017Business Model Generation (Osterwalder and Pigneur, 2010)12Key PartnersManufacturersRetailers Key ActivitiesMarketingR&DLogistics Value PropositionRazor handleBlades Customer RelationBuilt-in lock-inCustomer SegmentsCustomers Key ResourcesBrandPatents (blocking)ChannelsRetail Cost StructureMarketingManufacturingLogistics R&D Revenue Streams One time hand purchaseFrequent blade replacement
Razor and Blade pricing13
Long tail explained for music industry 1/22/2017Business Model Generation (Osterwalder and Pigneur, 2010)14
PSP/ Xbox versus Wii focus1/22/2017Business Model Generation (Osterwalder and Pigneur, 2010)15Key PartnersKey ActivitiesValue PropositionHigh performance consoleConsole audience Customer RelationCustomer SegmentsHardcore gamersGame developers Key ResourcesChannelsCost StructureRevenue Streams Hardware sales at a lossRoyalties from developers
Sony PlayStationMicrosoft XboxKey PartnersKey ActivitiesValue PropositionFamily consoleAccess to console usersCheap game development cost Customer RelationCustomer SegmentsCasual gamersGame developersKey ResourcesChannelsCost StructureRevenue Streams Profitable hardware salesRoyalties from developers
Nintendo Wii
Red Hat Linux business modelKey PartnersLinux Open Source development community Key ActivitiesSoftware support servicesSoftware visioning and testingValue PropositionFree (Linux) open source based softwareContinuous upgraded, services and guaranteed software Customer RelationSelf service and direct access to engineers Customer SegmentsAdvertisersWeb surfersContent ownersKey ResourcesRed Hat (Linux) software ChannelsRedhat.comRed Hat global branches Cost StructureElements of a service company Revenue Streams Professional subscription Free software
1/22/201716Business Model Generation (Osterwalder and Pigneur, 2010)
Surge pricingUbers way!17
Pricing model of Uber: Travis Kalanick18
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Pricing hi-tech productsTechnology obsolescenceGreater featuresMoores LawFragmentationEmergence of platformsUser generated contentDistributed supply chains
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Disruptive innovations:
21Aimed at entirely new customersSimple and cheaperGood enough for some time
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Explained by Christensen 23
Predatory pricing 24
Predatory pricing? 25
The Business Model of Ola explained by Bhavish26
Skimming pricing 27
Contrasting the approaches 28
Freemium Model LinkedIn29
The cash curve assessment for pricing 30
Price Elasticity of Demand
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Fast food?Petrol?
Impulse purchaseLuxury goodsNecessary goods
Three levels of frugal innovation
Tata NanoGodrejs ChotuKoolGEs ECG Machine
Frugal Product Innovations by organizations Frugal Process and Business Models by organizations
Frugal Mindset and Improvisation at the grassroots level
Mitticool
Paddle powered cycle
Espresso maker
Associated concepts
Developmental Economics Appropriate Technology
Sustainability Gandhian InnovationInclusive Innovation
Engineering & Product DevelopmentFrugal EngineeringLean Disruptive InnovationBusiness Strategy Bottom of Pyramid InnovationReverse Innovation Mindset and AttitudeJugaadBricolage
References A Quick Guide to Value-Based Pricing (HBR August 2016)Business Model Generation (Alex Osterwalder, 2009)Pricing new products (McKinsey & Co.)5 Negotiation Tips From Steve Jobs (TIME)The Five Competitive Forces That Shape Strategy (YouTube)Payback: Reaping the Rewards of Innovation (BCG)Frugal innovation: aligning theory, practice, and public policy (Soni and Krishnan)Disruptive Innovation Explained (YouTube)Business Model Generation (Osterwalder and Pigneur)
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