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| Companies can no longer turn to routine price hikes for products, subscription, programming, and advertising every year. What’s required is a move to new, targeted price structures, greater pricing flexibility that better reflects market sensitivities, and technology that supports dynamic pricing decisions with timely, accurate information. |
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Digital services pricing
McKinsey has been engaged by several MSOs in the U.S. and Europe to define digital service packages and pricing. The teams developed service offerings based on the comprehensive micro-economics of packages and understanding of customer preferences through research and market testing. The projects resulted in structures of offerings that were highly attractive to consumers and profitable for the operator, appropriately sequenced to reflect operational and marketing constraints.
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Designing a new pricing strategy
McKinsey developed a new pricing strategy for a leading global information services publisher. To ascertain the appropriate price levels and positioning for one of its primary product suites, the team conducted historical pricing variability analysis, evaluated competitive pricing approaches, identified emerging pricing trends, and identified customer segment product needs by market. The result was a successful repositioning of the products in their core markets as well as the launch of a series of new country business models.
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Optimizing ad block pricing
A Latin American TV broadcaster asked McKinsey to help optimize ad pricing across audience groups. Working with the client, the team adopted software tools to inform sales teams of relative demand and supply, raised the profile of the ad sales function and redesigned the incentive system to encourage new client introductions. These actions resulted in a 30 percent increase in ad sales revenue within 3 months.
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