Value-based Marketing Strategy

Pricing and Costs for Relationship Marketing

Santiago Lopez

• Publisher: Vernon Press
• Year: 2016
• eBook ISBN: 9781622730537
• Edition: 1
• Topic: Business
• Subtopic: Marketing
• Index: Business

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.

Table of contents

• Learning Objectives
• Chapter 1 The Business Environment
• 1.2 Markets and the Economy
• 1.4 Types of Buyers
• 1.5 Competition
• Chapter 2 Marketing Concepts
• 2.2 Differentiation
• 2.3 Segmentation
• 2.6 Marketing mix
• 2.7 Transactional Marketing
• Chapter 3 The Value Concept
• 3.2 Resistance in sales
• 3.3 Supply and Demand with Value
• 3.4 Value: Questions and Answers
• Chapter 4 Price
• 4.1 Definition of Price
• 4.4 Optimum Price
• 4.5 Pricing Policy
• 4.6 Pricing Strategies
• 4.7 Services´ Pricing
• 4.8 Sales Velocity
• Chapter 5 Costs
• 5.1 Variable Cost
• 5.3 Manufacturing Cost
• 5.6 Other Costs
• Chapter 6 Contribution Margin
• 6.1 Contribution Margin Definition
• 6.2 Optimum Value
• 6.3 Breakeven Analysis
• 6.4 Applying Contribution Margin
• 6.5 Variable Cost Percentage
• Chapter 7 Applying Value
• 7.1 Strategy
• 7.4 Value Model
• 7.5 Profitability
• 7.6 Income Statements
• 7.7 Sources and Resources
• 7.8 Value-based pricing
• 7.9 Practical Application Cases
• Chapter 8 The Value Matrix
• 8.1 The Value Matrix
• 8.2 Building the Value Matrix
• 8.3 Pricing and Strategy
• 8.4 Business Modeling
• Chapter 9 Ethics in Marketing and Pricing
• Conclusion
• Appendix 1 Optimization of the Demand Function
• Appendix 2 Summary of Formulae
• Appendix 3 Value and Contribution Margin
• Appendix 4 Sales Volume Variance Analysis
• Appendix 5 Discounts
• Appendix 6 Solved Problems in Pricing
• Bibliography
• Index