OnDemand WTP Pricing Research

Discussion: The 5 biggest challenges in pricing in Asia

I was part of a discussion recently about where I see the biggest current challenges in pricing in Asia and it inspired me to share my views with you in this blog.

When it comes to developing powerful pricing strategies and well-oiled pricing departments, Asia is still behind both North America and Europe. There is no doubt in my mind that North America is the leading example for everyone when it comes to understanding the value of a solid pricing setup. Europe started playing catch up to that years ago and things are developing fast here in Asia now – but Asia is behind both North America and Europe. We all know however that once something gains a foothold in Asia, the Asian Tiger mentality takes over and things starting moving fast and when it comes to pricing it is no different.

Where I still see lots of organizations struggle in Asia and it might not only be in Asia, but I will leave you to comment on that after reading this blog, is:

1. Pricing is still widely based on cost or competitor pricing and not on value

I see many companies who have invested large sums of money on hiring great pricing practitioners with great skill-sets but instead of working on understanding the value they add to the customer in comparison to competition, market segmentation, willingness to pay and the core foundation of value based pricing, the pricing team is forced to work on a mix of cost plus pricing and competitor pricing.

The fact that this is happening could in my opinion be because of a lack of understanding of both the customer and the competition and it is considered a “safer option” to price close to the competition. On the other side, I have also seen companies have an abundance of market intelligence and still not utilize it. This could signal a lack of courage to really charge more than competitors even if you are absolutely sure that your product is better and adds more value to the customer than competing products or a lack of belief in your own analysis.

Top Comments

JC Yip

Perhaps let me offer another dimension for thought. North America is mostly a large homogeneous market. Asia is quite the opposite. If we take it down one level, there are economies where businesses do an excellent job in pricing (or value pricing). Examples include Australia, Japan, Korea and perhaps Singapore or Hong Kong. Then there is China, India, Vietnam etc where it is still developing. In short, I do agree there is some degree of catch up that Asia needs however it will vary by country… and even by industry.

Sameer Acharya 

We can add one sub point; there are companies who are less confident about their value proposition or there are many competitors who offers same values in that case organizations prefers to go with traditional way

Iqbal, Adnan 

Very good article. I think the same challenge is also in ME.Companies must understand their capabilities to charge the price they deserve for the value they deliver.

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The 5 biggest challenges in pricing in Asia

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