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PRICE REALIZATION

Published on Nov 18, 2015

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PRESENTATION OUTLINE

PRICE REALIZATION

MULTIPLE VERSIONS AND CREATIVE PACKAGING
Photo by IvanClow

NEWS: P&G TIDE

P&G INTRODUCES LOW PRICED BASIC TIDE
Photo by judy_and_ed

But That's Not News

News is Price of its Premium Tide Plus Went Up

Side-Effect of Cheaper Version

Why did the price of Already Premium Priced Version Go Up?

LET US START WITH BASICS

DEMAND CURVE TELLS US HOW MANY WILL BUY AT DIFFERENT PRICES

CONSUMER SURPLUS IS

HOW MUCH WE VALUE LESS PRICE WE PAY

P&G CHOSE A PRICE

CUSTOMERS WHO VALUE TIDE PLUS MORE THAN ITS PRICE BUY IT

BUT LOTS DON'T BUY TIDE PLUS

THEY VALUE IT LESS THAN ITS PREMIUM PRICE
Photo by pigstubs

WHEN TIDE BASIC WAS INTRODUCED

THERE IS SECOND DEMAND CURVE

THIS EXPANDS CUSTOMER BASE

THOSE WHO VALUE TIDE BASIC MORE THAN ITS PRICE BUY IT

BUT PREMIUM CUSTOMERS NOW HAVE ANOTHER CHOICE

TIDE BASIC AT LOWER PRICE TEMPTS SOME
Photo by hang_in_there

SOME WILL SWITCH TO BASIC

BUT OTHERS MAY NOT SEE ENOUGH VALUE IN BASIC
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PEOPLE SWITCH BECAUSE

LOWER PRICED VERSION OFFERS MORE VALUE THAN TIDE PLUS
Photo by drubuntu

BUT OTHERS ...

MAY NOT LIKE BASIC AT ANY PRICE
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THESE ARE HIGH VALUE CUSTOMERS

THEY VALUE TIDE PLUS MORE THAT ITS CURRENT PRICE
Photo by cameraburps

THEY ARE WILLING TO PAY MORE

AND HAPPILY DO PAY HIGHER PRICE

HENCE THE P&G DECISION

BUT WAIT THERE IS MORE

IT IS NOT A STRAIGHTFORWARD PRICE INCREASE
Photo by bindermichi

WHY INCREASE PRICE

WHEN YOU CAN REDUCE QUANTITY
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WHY JUST REDUCE QUANTITY

WHEN YOU CAN REDUCE NUMBER OF LOADS

SAME PRICE BUT LESS PRODUCT

BUT WHY THE SHENANIGANS?

BECAUSE THE PREVIOUS PRICE IS ETCHED IN OUR MINDS
Photo by illuminaut

THAT'S REFERENCE PRICE EFFECT

ANY INCREASE COULD UPSET CUSTOMERS DESPITE VALUE
Photo by TomConger

WE HARDLY REMEMBER QUANTITY AND LOADS

UNLIKE PRICE WE PAY, OUR MEMORY IS NOT LASTING
Photo by PG.NETO

THAT MY FRIEND

IS PRICING EXCELLENCE
Photo by Tojosan

Want to find your product's demand curve?
Want to find how to set price of second version?
Want to price for profit?
Talk to me @rags

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