Module 7

Question 1

According to McKinsey & Co.; what is the biggest tool for earnings improvement?

Answer 1

Pricing

Question 2

Why is pricing so crucial?

Answer 2

• Profitability and revenue generation
• Competitive advantage
• Perceived value
• Customer acquisition and retention
• Brand image and reputation
• Product lifecycle management
• Market penetration and expansion
• Market responsiveness
• Maximizing marketing efforts
• Overall business strategy

Question 3

What are the most common pricing strategies for consumer products and B2B?

Answer 3

Penetration pricing, price skimming, premium pricing, economy pricing, going-rate pricing, bundle pricing, dynamic pricing, promotional pricing, competitive pricing, etc.

Question 4

Price Waterfall

Answer 4

A visual representation and analysis tool to break down and understand the various components that contribute to the final price of a product or service.

→ this helps companies gain insight into the factors impacting their pricing decisions and profitability.

Question 5

Price Sensitivity

Answer 5

The degree to which customers’ purchasing behaviour is influenced by changes in the price of a product or service.

Question 6

High Price Sensitivity

Answer 6

Customers are highly responsive to price changes.

Question 7

Low Price Sensitivity

Answer 7

Customers are less responsive to price fluctuations.