Read these paragraph related to ''B2B PRICING STRATEGIES'' given below the questions and try to answer any one or two of the following question below related to the paragraphs:

What is the main problem or issue that related to pricing principles B2B?

What is the central claim, argument, or point in pricing principles B2B?

What are the assumptions we can makein pricing principles B2B?

Describe an evidence related to pricing principles B2B?

What are the strengths and weaknesses of pricing principles B2B?

What are possible counterarguments that the pricing principles B2B claims?

Why are the problem(s) and the argument(s) interesting or important in pricing principles B2B?

Understanding the pricing principle:

- Perhaps the biggest mistakes in pricinghappen when you confuse the meaningof cost, price, and value.Let's review these so you avoid these pitfalls.Let's use this for our example.Baseball is a very popular sport in the U.S.,and this of course is the ball used in that sport.Each year the professional baseball league here in the U.S.uses about 900,000 of these.Wow.So let's start with this simple question.

What is the cost of this baseball?Well, the cost is what the manufacturermust put into the ball to make it and sell it.That includes all the material cost,labor, shipping, and selling costs.Let's say on average that's about $1.Now that wasn't too hard.So let's ask the next question,what is the price of this baseball?Price is defined as the amount of moneya consumer must pay to take ownership of the ball,in other words, to buy it.

So when pricing,many people think there's a relationshipbetween the cost of the baseballand the price of the baseball.To most people's surprise,there is actually no linkage whatsoeverbetween the cost of a product or service and its price,at least from the customer's point of view,which, by the way, is most important in marketing.The average price of a baseball today is around $6.Now hold on.I know what you're thinking.You're thinking there's no wayyou would ever price your product below your unit cost.

Well, that's not completely true.There are a few occasions where you might price somethingbelow the cost to produce.Not often, but it can happen.My point is this.When you set prices based on cost,you're likely to end up with an artificial price pointthat doesn't resonate with the customer.This pricing approach is often called target margin pricing.You take the cost of your product and add a marginto satisfy some profitability goal.Hey, the truth is your customersdon't care about your costs.

So here's the final question.What is the value of this baseball?Well, it depends on who's assessing the value.If this was the baseball that, say,your son hit to win the game,then it's really valuable.And by the way,this is the ball that my son hit to win a game,so to me, its value is really high.But for you, not so much.Now what is the relationship between price and value?Remember, a price is a piece of information.

It's a signal to the consumer about the value.Consumers, including B2B customers,equate price as an approximationof the value they're likely to receive.If they perceive the value to be higher than the price,they'll buy your product or service.If perceived value is equal to price,then they might buy your product.And if value is less than your price,they won't buy your product.So look at your prices and ask yourself how are they set?Were they based on the cost to produce the productor the value customers perceive in the product?You'll want to stick with pricingbased on customer-perceived value,not your costs.

Defining stake holders and their role

With B To B pricing, you'll be more effective...if you understand how people behave...when they're buying products...and services for their organizations....As you'll see, there are a lot of similarities...between how consumers behave in their personal life,...versus their work life....But, there are also some key differences....Just like consumers, organizations need...to be motivated if they're going to buy....And that starts with the perceived lack of something....In other words, a need....

When buying something, organizations...are just like everyday consumers in terms...of the five-step process they follow....The first step being recognition, or problem recognition....Then, information search, followed by evaluate...the alternatives, then purchase,...and finally, post-purchase behavior....But the big differences with organizational...from consumer behavior is how they work...through each of these steps....

First of all, almost every organization uses...a group of people to buy products and services....And in marketing, we call that group...the decision-making unit, or DMU....

Defining values:-

Well, that's not completely true.There are a few occasions where you might price somethingbelow the cost to produce.Not often, but it can happen.My point is this.When you set prices based on cost,you're likely to end up with an artificial price pointthat doesn't resonate with the customer.This pricing approach is often called target margin pricing.You take the cost of your product and add a marginto satisfy some profitability goal.Hey, the truth is your customersdon't care about your costs.

So here's the final question.What is the value of this baseball?Well, it depends on who's assessing the value.If this was the baseball that, say,your son hit to win the game,then it's really valuable.And by the way,this is the ball that my son hit to win a game,so to me, its value is really high.But for you, not so much.Now what is the relationship between price and value?Remember, a price is a piece of information.

It's a signal to the consumer about the value.Consumers, including B2B customers,equate price as an approximationof the value they're likely to receive.If they perceive the value to be higher than the price,they'll buy your product or service.If perceived value is equal to price,then they might buy your product.And if value is less than your price,they won't buy your product.So look at your prices and ask yourself how are they set?Were they based on the cost to produce the productor the value customers perceive in the product?You'll want to stick with pricingbased on customer-perceived value,not your costs.