Download - SP JAIN PRICING WORKSHOP Deepak Bhatia
![Page 1: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/1.jpg)
PricingDeepak Bhatia
![Page 2: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/2.jpg)
A little bit about me…
![Page 3: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/3.jpg)
My work experience so far …
![Page 4: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/4.jpg)
So What is Pricing?
![Page 5: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/5.jpg)
Its as simple as this…
Goods or
services
Value to custom
erCustomer Price
![Page 6: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/6.jpg)
How did we price products in P&G/Pepsi?
![Page 7: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/7.jpg)
Parameters used• Size of the SKU – Bottle/Sachet/Packet etc• Volume per SKU – ml/Kg• Manufacturing & Packaging costs• Research & Development costs • Sales & Distribution Costs• Advertising and branding costs• Competition pricing• Incremental benefits compared to other products in the same
category• Etc etc … anything that directly or indirectly adds to the cost of the
product on a fixed or variable basis
![Page 8: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/8.jpg)
But there was one thing we all used very effectively in India…
![Page 9: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/9.jpg)
Affordability
![Page 10: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/10.jpg)
“Paanch” or “Do” Rupaye or “Pachchees”
![Page 11: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/11.jpg)
Videoshttps://youtu.be/QZWgamF8YwA
https://youtu.be/jmNrvlQ73pU
Coke
McAloo Tikki
https://youtu.be/jAKjI1kItDM Vodafone
![Page 12: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/12.jpg)
Biggest Learning for most marketers in India was that end consumer price was defined by affordability
![Page 13: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/13.jpg)
Lets look at Telecom
![Page 14: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/14.jpg)
What was the price per minute when it was launched?
![Page 15: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/15.jpg)
![Page 16: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/16.jpg)
Clearly affordability scaled up the consumption & the subscriber base in the country
![Page 17: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/17.jpg)
Chota Recharge to “Chutta” Recharge
![Page 18: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/18.jpg)
But all this drove mass market consumption
![Page 19: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/19.jpg)
What about the other segments?
![Page 20: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/20.jpg)
In Telecom we divide our base into…• Low Value Subs• Medium Value Subs• High Value Subs• Ultra High Value Subs
![Page 21: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/21.jpg)
![Page 22: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/22.jpg)
Which is basically two key segments?• Mass
• Premium
![Page 23: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/23.jpg)
Our Current Market share also defined our pricing in the relevant markets• If we were a distant #2 – Value pricing for most of the
base• If we were market leaders – premium pricing for most
of the base• If we were just a new entrant in a market – loss
leader/marginal cost pricing on certain line items
![Page 24: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/24.jpg)
An interesting concept in Telecom• GEOGRAPHY BASED PRICING1. Home Zone – Rural vs. Urban2. Low Market share districts – differential pricing vs.
high market share districts3. College campus pricing vs. home use pricing
![Page 25: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/25.jpg)
What are the key objectives of any company ?
• Grow Revenues
• Lower costs
• Improve profitability
![Page 26: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/26.jpg)
The way we price can impact all the 3 key levers of any business…
![Page 27: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/27.jpg)
Revenues ?
REVENUES
Subs
Rate Per Min
Min Of
Usage
![Page 28: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/28.jpg)
Biggest Disruption in the telecom pricing was that of …
![Page 29: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/29.jpg)
Per Second Billing…
![Page 30: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/30.jpg)
Suddenly …Over 25% of Revenues on a per sub basis disappeared from the market
![Page 31: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/31.jpg)
New Operators used this technique to gain share including companies like Du in UAE & Tata Docomo in India
![Page 32: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/32.jpg)
Another case of disruptive pricing• Whatsapp vs. SMS
• And one about to happen – 4G at 3G prices
![Page 33: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/33.jpg)
So what will companies look for in students like you for developing their pricing strategies
![Page 34: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/34.jpg)
![Page 35: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/35.jpg)
![Page 36: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/36.jpg)
![Page 38: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/38.jpg)
Clear Skills needed…• Strong analytical skills• EXTREMELY strong database skills• Sensitivity analysis
• AND LAST BUT VERY VERY IMPORTANT SKILL
![Page 39: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/39.jpg)
STRONG PRESENTATION SKILLS to convert large numerical data with analysis into meaningful visual charts for management to take decisions without getting into HOW the data was crunched but WHAT to do next …
![Page 40: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/40.jpg)
Case Study - 1• You are a number 4 operator launching in a market
that is having 100% penetration of subscribers in the TOP 3 operators.• The Telecom Regulatory controls pricing decisions with
pre approvals needed before launch• You have a weaker network in rural compared to urban• The Top 3 operators have enough margins to match
your pricing instantly and sustain it till you budge• You need to hit a 10% market share in year 1 of launch
![Page 41: SP JAIN PRICING WORKSHOP Deepak Bhatia](https://reader034.vdocuments.net/reader034/viewer/2022052305/58ae6ab01a28abd11c8b573f/html5/thumbnails/41.jpg)
Case Study - 2• You are launching a new shampoo in the market• The Top 3 Brands occupy close to 90% share of
revenues• They are more well distributed than any other product
category of the same price points• Their Advertising muscle is 5 times that of any new
player• They have a kitty of new innovations waiting to be
introduced to attack any new comer in this category