Understanding Pricing Power with Kevin Mitchell and Jeet Mukherjee
Sep 6, 2023
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Kevin Mitchell, founder of Professional Pricing Society, and Jeet Mukherjee of Holden Advisors discuss the concept of pricing power and its measurement. They explore the complexity of pricing, incorporating behavioral economics and psychology. The importance of pricing power is emphasized, along with the need for a comprehensive go-to-market strategy. They also highlight the significance of considering the total cost of ownership in pricing decisions.
The definition of pricing power varies among CXOs, highlighting the need for a common understanding and measurement.
Segmenting the market correctly is crucial for accurately comparing pricing power and utilizing margin as an indicator of differential value.
Deep dives
Importance of Pricing Power
The podcast discusses the importance of pricing power based on interviews with CXOs. Pricing power was unanimously deemed important by all participants. However, their definitions of pricing power varied greatly, highlighting the need for a common understanding. The conversation aims to explore ways to measure and identify pricing power, as well as strategies to acquire and maintain it.
Measuring Pricing Power
The podcast mentions the Professional Pricing Society's survey on rating companies' pricing power. The survey revealed an average score of 6.47 out of 10, indicating a slight decrease from the previous year. The podcast emphasizes the importance of segmenting the market correctly to compare pricing power accurately. It also discusses using margin as an indicator of differential value and how different industry verticals require different comparison parameters.
Branding and Execution in Pricing Power
The podcast highlights how branding and execution power can contribute to pricing power. It explores the idea that execution in the marketplace and creating a differential value through branding are crucial components of pricing power. Additionally, the podcast mentions the need to understand how non-quantifiable factors, such as sustainability and long-term value drivers, can impact purchase decisions and pricing strategies.
Jeet Mukherjee of Holden Advisors and Kevin Mitchell of Professional Pricing Society discuss the significance of pricing power ahead of Jeet's keynote speaking session at our Fall Workshop and Pricing Conference in October!
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