"Why the Highest Price Isn't the Best Price," MIT Sloan Management Review, Winter 2010, 90 - 99.
“Charge what the market will bear” pretty well summarizes the pricing strategy of many suppliers serving business markets. They believe that practicing value-based pricing means finding out what the value of their offering is relative to alternatives for their customers and then charging as high a price as they can. But pursuing value-based pricing in that way is usually shortsighted in two respects. First, it neglects other potential means of profiting from delivering superior value that may result in greater overall profitability to a supplier. Second, it weakens customer relations rather than strengthening them, which a more progressive and comprehensive approach to value-based pricing can accomplish. We provide a framework for practicing value-based pricing in this more nuanced, strategic way.
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James C. Anderson, Nirmalya Kumar, and James A. Narus, Boston: Harvard Business School Press. In this authoritative book, James Anderson, Nirmalya Kumar, and James Narus explain how companies in business markets can use customer value management techniques to estimate the value of their market offerings, create value propositions that resonate with their customers, and improve the return they will get on the superior value that they deliver.
Publisher: Harvard Business School Press (2007)
"Tiebreaker Selling," Harvard Business Review, March 2014, 90 - 96.
In business markets, suppliers of nonstrategic market offerings often mistakenly assume that they have only two options of getting the customer’s business: stressing features that their offerings have but competitors’ lack and competing on price. Our management practice research found that this approach is most often ineffective. Once customers have narrowed the competition down to two or more suppliers that meet their basic specifications at a competitive price, they look for “something more” to break the tie and justify selecting one supplier over the other finalists. Taking the time to understand the customer’s business and priorities enables best-practice suppliers to identify the tiebreaking justifier – that noteworthy extra whose value is self-evident and shows the purchasing manager’s contribution to the business.
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Business Market Management explores the process of understanding, creating and delivering value to targeted business markets and customers. Relying upon empirical assessment of value in the marketplace, it provides a means of gaining an equitable return on value delivered and enhancing a supplier firm's present and future profitability. This book reflects the principles and practices of business marketing and – by presenting and conducting management practice research – strives to advance the field. It brings together venerable past thinking and leading-edge thinking to provide a progressive approach to managing business markets.
Publisher: Prentice Hall; 3rd edition (2009)
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“Muddling through on Customer Value in Business Markets?,” in Value First then Price: Quantifying Value in Business-to-Business Markets, 2017, 28 – 38.
“Muddling through” means “to achieve a degree of success without much planning or effort” (Merriam-Webster.com). This term reflects the approach of many businesses, leading to occasional success but more often to uneven and disappointing results. In this book chapter, James Anderson and Todd Snelgrove provide guidance on how businesses can achieve and sustain extraordinary success in customer value management.
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