The Strategic Planning Phases

• “Plan your dive, before you dive your plan”
• Establish or confirm directions and goals for the business
• Assess current business processes, structures and culture to identify gaps between needs and current capabilities
• Identify highly leveraged opportunities or critical issues which need to be addressed
• Prioritize the significant attributes towards achieving your goals e.g. Profitability, growth, market share, market leader, retention of customers, maximized plant capacity, etc.
• Assess the probability that the corresponding objectives & goals can be achieved

Identify the Competitive Environment,
Customer & Financial Strategy

• Determine the role of price in your product positioning
• Define what kind of competitive reaction can be anticipated to price moves in various situations
• Assess what industry supply & demand factors should be considered in judging competitive reaction
• Clarify who’s buying what & do we really need this customer?
• Determine past & emerging trends
• Determine how price & other actions can be used to manage competitors effectively & promote industry profitability rather than set off a price war
• Identify how customers respond to price changes
• Manage conflicting objectives like profit & volume when making pricing decisions
• Measure the role of variable & fixed costs

Quantify Product Values to the Customer

• Base price decisions on the customer’s perceived value rather than on cost (Conduct external customer & non-customer price and attribute research)
• Quantify value of product advantages (internally or using pricing tools)
• Determine whether value differences with competition are hard or of soft value? Will the customer credit you?
• Define if competition is within a price tier or across a price tier
• Manage the movement of customers both trading-up and down to lower price tiers
• Recognize & manage price changes in same-tier competitors
• Analyze individual competitors to assess their drawing power
• Create fighting brands - Price Fighters

Identification of certain criteria to select methodology

• Initial step is to define which model to use for pricing
• Identify the opportunity by certain criteria such as the type of customer, size of the opportunity, benefit to the customer, benefit to your company, price value positioning versus competitor, availability of information, etc
• Where possible, define the necessary steps to either beat or get the competition to follow

Methodology Choices

• Identify several product/pricing methodologies to reflect possible competitive outcomes
• To knowledgeably speculate about the competitive tactics to be employed
• To evaluate the impact on segments which will likely be targeted
• Identification of approaches that might be implemented for short & long term category performance
• To conduct an assessment of the strengths & weaknesses of each alternative competitive product/pricing strategy for each scenario
• Develop a communication strategy that reflects value trade-offs for prices charged for the appropriate customer segments