SPMG Partner Anovax Launches its China Pricing Campaign

 SPMG and its partners in Asia have begun a comprehensive marketing campaign throughout the APAC region in China. Chris Robinson, Managing Partner of Anovax and SPMG’s Global

Leadership Partner in the Greater China region, is circulating the newsletter below. As part of our campaign to promote SPMG’s growing presence in China, Chris introduces the principles of Value-Based Pricing and outlines the need to create a comprehensive pricing strategy based on understanding customer values. – Laura Johnston, Director of Marketing, SPMG


Anovax has been engaged in research for global clients in China for over 15 years – and we have learned a lot along the way. A lot of what we have learned is relevant to global brand marketers in China, which is why we like to update our clients on a regular basis about consumer markets in China. This is an occasional newsletter we hope delivers useful insights for you in your operations in China.  We hope it adds to your understanding of China, helps in dealing with its complexity and helps you gain from its growing potential! Get in touch with Anovax if you feel you want to know more about the strategic benefits of Value-Based Pricing from SPMG. – Chris Robinson




As I have said before in a previous blog on pricing attitudes, every student of Marketing 101 knows the famous “4-Ps” – product, place, price and promotion.  Tremendous effort is put into promotion (communications) strategy and the actual product sold but less on place and precious little on price.


What is it about pricing that makes it an often-ignored area in your brand strategy focus? 


First, pricing is often treated as a strategic area that can be dealt with internally – that there is no need to run this past some end-buyer evaluation.  This is because most markets seem to settle into clear price ranges that competing brands seem to accept as industry “norms”.  If you look at any category that has multiple brands competing in the same space nowadays, it is clear that price points are quite well established – and perhaps too well established? 


Second, there are the internal considerations. Frequently, cost-based accounting practices take precedence over end-buyer considerations. Rather than understanding the value that buyers place on the brand, price is based on an analysis of all the costs associated with the product’s design, production, and marketing – along with overhead recovery contribution and target profit margins. Industry pricing norms in the industry are set against target prices, which are usually adjusted downward to ensure they meet marketplace “expectations”.


Now if you think about it, does this sound a bit like the tail wagging the dog?


 This purely internal focus will often cause marketers to arbitrarily set prices according to cost and market trends – leaving money on the table.  Forgotten in this mind-set is just what buyers might actually be willing to pay.  This point was made in a recent study discussed in Integrity Pricing: Manufacturing Trust, published by our partner Strategic Pricing Management Group (SPMG*). More here.


Among the many common symptoms of poor pricing integrity in industrial and service markets, SPMG identifies several key areas where decision makers fail. This is as true for China as it is anywhere else:

  1. Discounting where it is both unnecessary and inappropriate

  2. Granting preferred pricing to customers when they have not earned it

  3. Catering to price-sensitive buyers

  4. Compromising the existing customer base to attract new customers

  5. Causing confusion among sales staff because of pricing objectives and actual implementation

  6. Giving price concessions to distributors during opening discussions without need to do so

In short, part-timing pricing means that pricing considerations come after the other “3-Ps” of the marketing mix and is more often than not based on internal accounting systems and market norms than they are on customer values.  In my article Are You Part-Timing Pricing Strategy? I state:


The question for marketing and sales management is simple – shouldn’t you be studying pricing from a buyer perspective, and most critically from a buyer’s perceived value perspective – or what we call Value-Based Pricing Strategy? The obvious benefit from using value-based pricing is, of course, enhanced profitability.  More here.  











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