Product marketing manager/Product Strategist/Head is responsible for developing the most suitable commercial model and associated pricing for the IP solution. It is mandatory to involve BU Finance in the process of preparing commercial model and pricing for the IP solution.

The commercials (including pricing) of an IP solution shall be prepared considering the following factors:

• Overall cost of development.
• Yearly maintenance costs.
• Predominant commercial models and pricing in the relevant industry for competing solutions (both direct and indirect alternatives).
• Observations on the market/industry trends which can affect the delivery models for the solutions.
• Overall Product strategy and GTM, which also includes anticipated profit/margins (eg: market share expectations).

The pricing models for an IP Solution will also be dependent on how we deliver it. The market analysis performed shall be used to understand the existing models in the industry for similar products or solutions. Pricing models should be aligned with product strategy and should help in maximizing the defined business goals – revenue, market share, profitability etc. It is necessary to study and understand the common pricing models in the market, as some “standard” can pre-exist from which it will be difficult to differ.

There are many other methods used for determining the pricing. Product manager needs to look into all the options and might have to use these methods in combination after performing detailed market analysis.

The predominant models around IP solutions are License fee & royalties based and managed service based models typically Software as a Service, or SaaS. In License Fee & per unit royalties model, the customer acquires limited rights to use the software (and sometimes to modify it as well). Managed Service based models can be consumption/usage based ie. transaction based (pay-per-use) or subscription (monthly/annual) based which can be scaled up or down on features/capabilities used. We can have one or combination of above models to suit a particular IP solution.

By default, each IP solution shall have list price for predominant model (standard model). For any of the other derived models the overall pricing shall be re-computed considering the list price as the base.

The pricing details and associated terms for the IP solution must be used only after the approval from BU Finance team.

Roles & Responsibilities:

Trigger/Entry Criteria:

Product Strategist/Head shall initiate the work on the commercial model and pricing at an appropriate stage of the product lifecycle.

Exit Criteria:

Approved commercial model and list price ready.