Value-Based Pricing
Competency Assessment

What’s your level of understanding of Value-Based Pricing? Take this Pricing IQ Quiz below to see where you’re at!

1)Value-Based Pricing is an inside-out approach towards setting a price?

True False

2)Based upon price pain threshold and value expectations, do the following four customer segments realistically reflect a customer segmentation split of a market?
1. Price Sensitive 35%
2. Convenience 10%
3. Loyal Customers 25%
4. Value Customers 30%

True False

3)In value-based pricing which comes first, the customer or the product cost?

Customer Product Costing

4)How many typical stages are there towards achieving pricing process excellence?

2 3 4 5

5)According to conventional wisdom, on average a 1% change in price translates to what _______ percent improvement in operating profit?

1% 5% 11% 15%

6)Before attempting to test for price and value expectations, value-based pricing encompasses which of the following customer segments?

Loyal Customers Price Sensitive Customers Value Customers Convenience Customers All of the above None of the above

7)Which type of pricing methodology is about translating product features into customer value?

Cost Plus Pricing Reference - Based Pricing Value Based Pricing

8)What should be your objective?

Market Share Profitability Revenue Return on Investment None of the above All of the above

9)Value-Based pricing often involves measuring some or all of these players:

Who’s the User Who’s the Influencer Who’s the Buyer Who’s the Decision Maker All the above None of the above

10)Value-Based Pricing is a customer-centric outside-in approach to pricing

True False

11)A price-value matrix is composed of how many different customer segments

1 2 4 6 9

12)Price is all about how the customer uses value, measures the economic value, perceived value and expressed value.

True False

13)Price is the reward you earn and must collect for doing the following:

Creating Value Capturing Value Communicating Value All of the above

14)Value-Based Pricing and Sales is about…

What the customer is buying What the company is selling Both

15)Value-Based Pricing is about understanding “what’s the right value instead of what’s the right price!”

True False

16)Which customer segments are elastic? * (You can choose more than one)

Value Buyer Price Sensitive Buyer Convenience Buyer Loyal Buyer

17)Which customer segments are inelastic? * (You can choose more than one)

Convenience Buyer Price Sensitive Buyer Value Buyer Loyal Buyer

18)Which customer segments do you offer little or no discounts? * (You can choose more than one)

Convenience Buyer Price Sensitive Buyer Loyal Buyer Value Buyer

19)Typically, customers will not switch vendors unless the price exceeds what percentage threshold?

5% 10% 15% 20%

20) In the process of setting a price there are five stages. Please arrange them in their proper order.
a) Understanding the Competitive Environment
b) Establishing Goals & Objectives
c) Developing a Customer Strategy
d) Understanding your Perceived Value Advantages
e) Developing Financial Strategy

21)The Value-Based Pricing Pyramid has five stages. Please arrange them in order starting with stage 1 representing the bottom of the Pyramid.
a)Tactical Pricing Review
b) Historical product & Customer Analysis
c) Conducting Primary Research & Competitive Intelligence
d) Having Revenue & Price Optimization Tools in place
e) Strategic Pricing Process Alignment

22)Which of the following activities are required when conducting a pricing diagnostic of a company’s pricing process?
(You can choose more than one)

Understanding Pricing & Value Strategies Data Collection Product Price Setting Setting Terms & Conditions Pricing Deployment Price Reporting & Monitoring Pricing Infrastructure All of the above None of the above

23)Pricing touches which functions within a company? (You can choose more than one)

Finance Marketing Operations Sales All of the above

24)When setting or reviewing price, whom should be involved in the process? (You can choose more than one)

Finance Marketing Operations Sales All of the above

25)How many questions must be asked about price when conducting Van Westendorp Analysis?

One Two Three Four

26)What are the typical stages in a pricing lifecycle? (You can choose more than one)

Growth Embryonic Maturity Harvest All of the above

27)What must you know when establishing a winning price/value proposition?

Product/Service Criteria Threshold Level Satisfier Criteria Driver Criteria A and D All of the above (Except E)

28)Eliminating unnecessary discounts can improve margins by what percentage?

20% 10% 5% 25%

29)Please arrange the following steps from 1st to last when conducting “Waterfall Analysis."
a) Quantify Revenue at List Price
b) Quantify pocket price or net net price
c) Identify & Quantify ‘on-invoice discounts
d) Quantify revenue and net price
e) Identify & Quantify ‘off-invoice’ discounts
f)Quantify COGS and other costs

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Value-Based PricingCompetency Assessment

Value-Based Pricing
Competency Assessment