Manufacturing companies are facing a challenging climate that can make it difficult to set effective pricing strategy. We have identified pricing trends for manufacturers and how to act in this comprehensive article.
Organizations invest a substantial amount of time, data, and assets to develop sound pricing strategies. Unfortunately, many companies struggle to integrate their pricing strategies and bring them to life in the market due to a lack of internal pricing enablers. For a successful strategy to be sustained and build organizational pricing capabilities, the infrastructure known as pricing enablers needs to be in place to support:
- Systems: Integrated data that can be easily extracted
- People: Cultivate strong revenue management-oriented culture
- Structure: Establish organizational hierarchy and decision-making that supports pricing realization
- Results & Planning: Established pricing process for granularly measuring and monitoring pricing progress
Without the above pricing enablers you will encounter the following challenges:
- Taking price increases without realizing bottom-line results
- Escalating discounting with minimal top-line growth
- Rising costs translating to shrinking margins
- Non-sensical pricing that undercuts your brand and channel integrity
- Sales team wasting time pricing deals versus selling
- Unable to assess the granular impact of pricing activities
- Inefficient and ineffective pricing decisions
- Lack of compliance with pricing strategies/guidelines
To maximize and sustain your pricing strategy, businesses need to equally focus on building the enablers as much as they focus on solving their pricing problems.