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i ci n g

t P r
Produc
#GetToKnowYourFACI

RAM
GFB Chair
aiesec.org
gfbchair@ai.
474
+639155695
SUMMARY
1 Why Pricing?
2 How to Do it?
3 GFB Pricing Evaluation
4 What to Expect Soon?
5 Final Messages
Why Pricing?
1. Why Talk about Pricing

Every business incurs costs in order for it to be able to drive its operations and
maintain its foundation.

There WILL ALWAYS BE COST related to AIESEC

In order to cover these, we need to generate revenue that is good enough to


cover the budget AND still marketable to the customers
2. What if we Charge too High

Lose Customers

Lose Profits

Harm Sustainability
3. What if we Charge too Low

Creates Losses cause we can’t cover the costs

Creates Losses cause we gain a lot of customers

Harm Sustainability
4. Why Care about Pricing

Increase Profitability

Reflection of How Much the Product is Worth

Increase Customers

More Opportunities for Re-Investments


But How do we do it?
How Evaluate Pricing?

1. GFB Pricing Evaluation Tool


2. Cost Analysis
3. Customer Acceptance
GFB Global Pricing Evaluation Tool

This tool shall help you to analyse your entity's pricing of exchange products. It is based
on economic indices and calculates global and regional averages to recommend
valuable pricing options. You have the possibility to compare your pricing with your
neighboring entities.
Cost Analysis

This analysis would allow you to evaluate different pricing options based on your
budgeted costs and target revenue. This would allow you to calculate the minimum price
levels that would keep the entity afloat
Customer Acceptance

Research based on your local reality thru reviewing your customers and competitors
Comparison of the Methods
GFB Pricing Evaluation Tool Cost Analysis Customer Acceptance

Based on... Economic-based Comparison Organizational Finances Customers Perspective

Highs Based on economic factors such as Based on costs and revenues that Based on customer insights,
GDP-PPP per capita, Human had been incurred and is competition environment and
Development Index (HDI), subregion, budgeted in order to achieve the local business culture that tackles
regional and global groups aiming to pricing that satisfies the cash the research direct to the
achieve the optimal prices across the flow audience of the products
network

Lows Doesn’t have direct touchpoints to Can potentially be risked of Will take the most working hours
customer opinions and cultural aiming too high or too low on and might be at risk of poor
understanding pricing due to poor budgeting evaluation of products brand (ie.
not known or poor understanding
of service)
GFB Pricing Optimal Price
Evaluation Tool
Economical
Perspective External
Perspective

Customer
Cost Analysis
Acceptance

Internal
Perspective
GFB Pricing Evaluation Tool
1. Where is it based?

The pricing tool is created based on the input from entities

Pricing information should be updated by MCVP F

GFB have no information on pricing unless you reported that

The accuracy of pricing tool depends on the accuracy of the data input
2. The Tool

Let’s go to the tool for an on hand example


3. After Reading the Tool
Pricing review should be conducted every year

DO NOT follow the recommended pricing blindly. Use it as reference only.

Conduct additional costs analysis and customer acceptance test.

Costs analysis: To examine the cost structure of your product to see if you can cover them with adjusted
pricing

Customer Acceptance: To study how much the customers are willing to pay for the products. You can do it
with a survey spreaded through LCs

Consult stakeholders, review the said studies and the pricing tool, then change your prices.

REMEMBER: It is NOT mandatory to change your price every year, but it is mandatory to review it every year.
What to Expect Soon
What to Expect Soon

Detailed Step-by-Step Guide for the Pricing Evaluation Tool


(Video & Outputs)

Pricing Report as of Q3 2018


Final Observations/Tips & Tricks

- Proper pricing is important for sustainability


- Pricing tool is the assistance from GFB for you to set correct pricing
- Always take note of your budget & customers
- Follow the guidelines to read the tool correctly
- Pricing review is mandatory every year.
- Changes in the pricing can be or cannot be done.
- Additional studies are required to support your decision to amend your price.
DIGESTING THE PRICING TOOL

OPENING THE REPORT:


- Choose your entity in the list
DIGESTING THE PRICING TOOL

SECOND TAB - ENTITY INFORMATION


- 1st part: General information about entity
- e.g. Region, Contact person, which products
are running
- Also some external information, e.g. GDP
PPP Group, HDI Group

- 2nd part: Entity pricing information


- Check if your pricing information is correct.
Notify GFB if it is wrong.
- Right hand side is your SUBJECTIVE opinion
about the pricing
DIGESTING THE PRICING TOOL

THIRD TAB - OGX AND IGE


- It is the tab for you to do comparison
- Weightings can be set on the right hand side to
calculate different recommended prices
- Use the ppp adjusted price to compare

- Remarks: this is just recommended price. It is


not necessary to follow them 100%. Adjust your
price together with other studies you do within
your entity
DIGESTING THE PRICING TOOL

THIRD TAB - IGT


- There are 4 different pricing schedule options
- There are 2 different recommended prices: one
for your option and one for all options
- Use the “Your Option” price to compare
- The “All Options” price is just FYR
DIGESTING THE PRICING TOOL

FOURTH TAB - IGV


- Reference only. as iGV has too many pricing
strategy.
- Compare your prices with others.
- Read what your predecessor wrote about the
pricing
AFTER READING THE TOOL

- Pricing review should be conducted every year


- DO NOT follow the recommended pricing blindly. Use it as reference only.
- Conduct additional costs analysis and customer acceptance test.
- Costs analysis: To examine the cost structure of your product to see if you can cover them with adjusted
pricing
- Customer Acceptance: To study how much the customers are willing to pay for the products. You can do it
with a survey spreaded through LCs
- Consult stakeholders, review the said studies and the pricing tool, then change your prices.

- REMEMBER: It is NOT mandatory to change your price every year, but it is mandatory to review it every year.
RECAP

- Correct pricing is important for sustainability


- Pricing tool is the assistance from GFB for you to set
correct pricing
- Follow the guidelines to read the tool correctly
- Pricing review, not change, is mandatory every year.
- Additional studies are required to support your
decision to amend your price.
< Ram>
gfbchair@ai.aiesec.org
+639155695474