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“Focus on Access instead of Place!”

09.10.2023

Dr. Sandra Rothenberger

Professor of Strategic Marketing

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 Moving between the Channels

P3

From Single Channel to Omnichannel…

(Hajdas et al., 2020)

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 Customer lives in an omni-channel and
social world…

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Moving between Online and Offline

6 | (marketoonist.com)

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 Showrooming and Webrooming

7 | (Waybeo, 2016)

8 | (Moengage, 2018)

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 Starbucks – how to make ordering easier
and boosting revenues?

9 | (Moengage, 2018)

Future of Retailing

10 | (CGI, 2017)

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 Why OmniChannel?

The need for omni-channel engagement across the four

stages in a user’s lifecycle:

Acquire
Activate
Retain
Revenue

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Why is omni-channel important?

Connections Choice Convenience Conversation

Omni-channel: Endless aisle: Flexibility: Affirmation:

consumers expect Store-based Consumers are Consumers usually
to connect with retailers must looking for begin their journey
brands anytime, connect their virtual convenience and on social platforms
anywhere shelf to the store flexibility of ho they looking for
especially on their shelf to create a purchase and information,
smartphones seamless shopping receive goods conversation and
experience recommendations
about products

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 Phygital Marketing – C&A Brasil

C&A Brasil (2012 & 2014)

https://www.youtube.com/watch?v=K4qdNb6FvGY
https://www.youtube.com/watch?v=4hCpIyy6LE4

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Definition

“…we define omni-channel management as the synergetic

management of the numerous available channels and
customer touchpoints, in such a way that the customer
experience across channels and the performance over
channels is optimized.”

(Verhoef et al. 2015)

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 C où – Carrefour Case
Situation
• Carrefour is the number one retailer in Europe (9,900
stores in 33 countries). Carrefour is committed at making
their customer’s shopping experience the best. This is why
the retailer is continually seeking to enhance its customers’
store experience by adopting innovative technologies.
• Many customers today, especially those living in cities, are
acutely time and promotion-sensitive –they don’t want to
lose unnecessary time shopping in stores and are
continuously searching for the best offers. For them, the
best, most enjoyable shopping experience is one that is
efficient and streamlined.

(Carrefour, 2015)

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C où – Carrefour Case
Solution – „Enhancing the store’s shopping experience”
• With this is mind, for Carrefour’s Villeneuve la Garenne
hypermarket, Pricer developed a retail solution with
Geolocalisation, Mobile Shopping and graphic SmartTAG
Electronic Shelf Labels.
• The mobile App created for Carrefour, called “C-où”, allows
customers to create ‘shopping lists’ and search for
products – meaning they can prepare their basket before
they even arrive at the store. The App also generates
recipe ideas, and, when a recipe is selected by the
shopper, highlights and suggests which other products are
required. The solution also includes geolocalisation – once
inside the store, it helps customers find any product, and
optimises their shopping route through indoor navigation.
(Carrefour, 2015)

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 C où Carrefour

(C où Carrefour, 2015) https://www.youtube.com/watch?v=5xOTjhWG5A0

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OmniChannel

In-Store

Mobile Social

Web

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 ZALANDO

“At Zalando, our purpose of reimagining

fashion for the good of all drives us to make
the fashion world smarter, friendlier, and
more open.”

presentation 19 |

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Zalando Fact Sheet

• Founded: 2008
• Headquarters: Berlin, Germany
• CEOs: David Schneider and Robert
Gentz
• Industry: E-commerce, Fashion
Key Figures (2020):
• Revenue: €10.4 billion
• Employees: 14,000+
• Active Customers: Over 34 million
• Countries Served: 17 European
countries
Business Model:
• Leading online fashion and lifestyle
platform in Europe.
• Connects customers, brands, and
partners.
• Offers a wide range of fashion
products and operates an online
marketplace.

20 | presentation

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 Zalando Fact Sheet
Logistics and Fulfillment: Technological Innovations:
• Multiple fulfillment centers for • Utilizes AI for personalized
efficient order processing. shopping.
• Last-mile delivery options for fast • Tools for sizing and fit advice.
delivery.
Sustainability Initiatives:
Competitive Landscape: • Aims to become a sustainable
• Competes with ASOS, Boohoo, fashion platform.
Zara. • Sustainability ratings for products
and eco-friendly brand promotion.
Key Services:
• Online Marketplace with 2,500+
brands.
• Zalando Lounge: Exclusive
discounts.
• Zalando Wardrobe: Try-on and
return feature.

21 | presentation

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V.M.O.S.A.?

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 Zalando – Business Model

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Zalando in a nutshell

24 | presentation

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 Strong Growth track since 2008

25 | presentation

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Zalando „Unique“ Value Proposition

?
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 Zalando „Unique“ Value
Proposition?

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“Focus on Value instead of Price!”

09.10.2023 & 10.10.2023

Dr. Sandra Rothenberger

Professor of Strategic Marketing

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 Topics to be discussed

• Setting the Stage for “Value” Pricing

• “Sell Value, not Price!”

• Monetizing Value

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10 Questions around pricing…

• What Are Our Business Objectives?
– What are our short-term and long-term revenue and profitability goals?
– How does pricing contribute to achieving these objectives?
– Are we focused on market share, profitability, or customer acquisition?
• Who Is Our Target Customer?
– Who are our ideal customers, and what are their characteristics and preferences?
– What value do our products or services provide to these customers?
– What is their price sensitivity, and how willing are they to pay for our offering?
• What Is Our Cost Structure?
– What are our fixed and variable costs associated with production, marketing, and
distribution?
– How do these costs impact our pricing decisions and profit margins?
– Are there opportunities to reduce costs or improve efficiency?
• What Is the Competitive Landscape?
– Who are our competitors, and what are their pricing strategies?
– How does our product or service compare in terms of quality and features?
– Can we differentiate ourselves through pricing, or do we need to focus on other
value propositions?

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 10 Questions around pricing…
• What Is the Value Proposition?
– What unique features or benefits does our offering provide to customers?
– How does our pricing reflect the perceived value of our product or service?
– Can we communicate this value effectively to customers?
• How Do We Set the Right Price Point?
– Should we use cost-plus pricing, value-based pricing, or competitor-based pricing?
– What is the optimal price point that maximizes profit and aligns with customer
expectations?
– Are there opportunities for tiered pricing or discounts?
• What Is Our Pricing Strategy Over Time?
– How often should we review and adjust our pricing strategy?
– How can we respond to changes in market conditions, demand, or competitor
actions?
– Are there seasonal or promotional pricing considerations?

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10 Questions around pricing…

• How Will Pricing Affect Customer Loyalty?
– Will our pricing strategy encourage repeat business and customer loyalty?
– Can we implement subscription or loyalty programs to incentivize long-term
relationships?
• Are There Regulatory or Legal Considerations?
– Are there any legal or regulatory constraints on our pricing practices?
– Do we need to comply with pricing transparency or anti-discrimination laws?
• What Data and Analytics Can Inform Pricing Decisions?
– How can we leverage data on customer behavior, sales, and market trends to make
informed pricing decisions?
– Are there pricing optimization tools or software that can help us analyze and adjust
prices?

32 | (Lisa Girard, 2013)

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 Price is just a number…

Price is what we pay for what we get. It is the

amount of money needed to acquire a product
or a service.

Value is the quantitative measure of the worth of

a product or service in an exchange for
something else. So, price is value expressed in
monetary terms.

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Questions to be asked…

Does your pricing strategy provide you with

a competitive advantage?

And is your pricing process one of your core

competencies?

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 Pricing Setting Process

Pricing Objective

Pricing Approach
Customer-
Company-imposed Pricing Collaborative Pricing
imposed Pricing

Competition
Cost Based Value/ Customer Based*
Based

Pricing Strategies

Pricing Tactics

*target costing

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Cost Based Pricing

Cost-based pricing is a pricing strategy that primarily hinges on
calculating the expenses involved in producing a product or
delivering a service. It involves identifying all the costs associated with
production, such as raw materials, labor, overhead, and any other
operational expenditures. Once these costs are tallied, a predetermined
markup or profit margin is added to the total cost to establish the selling
price.
This approach is straightforward and provides a clear understanding of
how costs impact pricing decisions. However, it doesn't directly
consider market demand or how customers perceive the value of the
product or service. Therefore, while cost-based pricing ensures that
expenses are covered and a profit is made, it may not always align with
what customers are willing to pay. It is essential to consider the balance
between cost-based pricing and other strategies like value-based pricing
and competition-based pricing to optimize profitability and competitiveness
in the market.

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 Competition Based Pricing
Competition-based pricing is a pricing strategy that revolves
around the fundamental principle of assessing and
establishing prices for a product or service based on the
prevailing pricing structures within the competitive
marketplace. This approach recognizes that pricing
decisions cannot exist in isolation but must be responsive to
the realities of the broader business landscape. Competition-
based pricing strategies involve various approaches that
businesses can adopt to compete effectively in the
marketplace. These strategies are based on monitoring
and responding to the pricing strategies of competitors

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Value Based Pricing

Value-based pricing is a pricing strategy where the price of a
product or service is determined by the perceived value it
delivers to the customer rather than the cost of
production. In this approach, businesses assess how much
value their offering provides to customers, considering factors
like the product's unique features, benefits, and the problem it
solves. By aligning the price with the perceived value and
willingness of customers to pay, companies can capture a
fair share of the market and potentially command premium
prices for superior offerings. This approach focuses on
understanding the customer's perspective and emphasizes
delivering value that justifies the price, making it a customer-
centric approach that can result in increased profitability
and competitiveness.

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 „Value Tag“

Every product has a price tag, but you never see a “value
tag.”
A value tag tells the customer “what’s it worth for me?” to
buy the product.
Economic theory says that customers are willing to pay
more for products that deliver them higher value
(perceived or measured).

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The Lemonade Stand

www.coolmath-games.com/0-lemonade-stand

40 | (coolmath-games)

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 Lemonade Stand - Price Quiz
• You have 7, 14, or 21 days to make as much money as possible, and you’ve decided
to open a lemonade stand! You’ll have complete control over your business, including
pricing, quality control, inventory control, and purchasing supplies. Buy your
ingredients, set your recipe, and start selling!
• The first thing you’ll have to worry about is your recipe. At first, go with the default recipe,
but try to experiment a little bit and see if you can find a better one. Make sure you buy
enough of all your ingredients, or you won’t be able to sell!
• You’ll also have to deal with the weather, which will play a big part when customers are
deciding whether to buy your lemonade. Read the weather report every day! When the
temperature drops, or the weather turns bad (overcast, cloudy, rain), don’t expect them
to buy nearly as much as they would on a hot, hazy day, so buy accordingly. Feel free to
set your prices higher on those hot, muggy days too, as you’ll make more profit, even if
you sell a bit less lemonade.
• The other major factor which comes into play is your customer’s satisfaction. As you
sell your lemonade, people will decide how much they like or dislike it. This will make
your business popular. If your popularity is low, fewer people will want to buy your
lemonade, even if the weather is hot and sunny. But if you’re popularity is high, you’ll do
okay, even on a rainy day!
• At the end of 7, 14, or 21 days you’ll see how much money you made. Play again and try
to beat your high score!

41 | (coolmath-games)

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Lemonade Game – Business Model

Canvas

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 …your turn!

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Value-Pricing Thermometer

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 Any Questions…

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Prof. Dr. Sandra Rothenberger

Solvay Brussels School of Economics & Management
ULB CP 114/03
50, avenue F.D. Roosevelt
B-1050 Brussels
Tel.: +32 2 650 48 67
Sandra.rothenberger@ulb.be

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