B2B Pricing Strategies: Boost Profitability with Effective Bidding

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This article is a summary of a YouTube video "Lec 45 - B2B Pricing: Competitive Bidding" by IIT Roorkee July 2018
TLDR Understanding value-based pricing and implementing effective pricing strategies can increase profitability in B2B markets.

Timestamped Summary

  • 💰
    Understanding value-based pricing in B2B markets can increase profitability without affecting sales, and product mix pricing strategies are important for maximizing profits.
  • 💲
    Different versions of a product have different prices based on their level of advancement and target audience, and optional and captive product pricing strategies can be used to increase profitability.
  • 💰
    Companies can increase profits by selling byproducts, offering product bundles, and attracting customers to buy more through bundling strategies.
  • 📊
    B2B pricing uses competitive bidding to attract customers and increase profit, with government agencies using this process to ensure fairness in selecting sellers for projects.
  • 📝
    Bidding in the business market can be closed or open, with closed bidding requiring a formal invitation, while open bidding allows for continuous discussion and price changes, making it useful in competitive bidding strategies for profit maximization.
  • 💡
    The buying organization determines the order based on the lowest bid price, and factors such as probability of acceptance and expected profit are considered when making the bid, with the speaker concluding that maximum profit can be achieved at a bid price of 400, but estimating the probability of acceptance is challenging and can lead to missed profit opportunities or losses if the bid is incorrect.
  • 📺
    Person eight AI is a startup that helps companies save money on video production by creating interactive video content and bots in multiple languages, and they should determine their pricing objective and consider the benefits of their services to determine the right pricing method.
  • 💰
    It is important for B2B companies to offer a freemium plan to attract new users, but founders should be cautious of underpricing themselves and consider different pricing options based on business objectives.


  • How does understanding value-based pricing impact profitability in B2B markets?

    — Understanding value-based pricing can increase profitability in B2B markets without affecting sales, as it allows businesses to set prices based on the perceived value of their products or services.

  • What are product mix pricing strategies?

    — Product mix pricing strategies involve adopting various pricing strategies for products with different combinations and options, especially large or high-value products, to maximize profits.

  • How do companies use pricing strategies for their product lines?

    — Companies use pricing strategies such as offering some products for free or at a low price to attract customers, while keeping other variants at a higher price.

  • What is optional product pricing?

    — Optional product pricing allows customers to customize their purchases and choose which features they want, increasing profitability for businesses.

  • How can companies increase profits through bidding in B2B markets?

    — Companies can increase profits by engaging in competitive bidding, where buyers and sellers determine the highest price a buyer is willing to pay or the lowest price a seller is willing to accept.

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This article is a summary of a YouTube video "Lec 45 - B2B Pricing: Competitive Bidding" by IIT Roorkee July 2018
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