Whitepapers (English)

Simon-Kucher & Partners provides a number of white papers covering a broad range of different topics:

Banking
	Innovative Product Design Modularization in the mortgage business Increased competition throughout the banking industry has forced banks for many years to constantly devise new product offerings to stay competitive. In today’s banking market, it is imperative that the common one-size fits all approach to building products is overcome in order to construct innovative products that fulfill the needs of different customer segments or, ideally, of each individual customer. One way of doing this is to use the concept of modularization. With this, banks can offer highly customized products that increase the value to their customers.
	Customer Price Awareness Psychology & Pricing Customers’ price awareness and perception will often effect how price changes impact revenue. Both the availability and quality of price information, such as current interest rates and charges, as well as a bank’s image amongst customers, play an important role in determining this relationship. The image of a price will influence customers most when their prices knowledge of the financial product in question is low. Indeed research shows that psychological effects, if taken into consideration when designing products and services, can have a significant impact on sales revenue.
	Price Wars, a Problem Facing the Banking Sector:Avoiding Falling Prices America is currently in the midst of price madness. It would seem nowadays that offering low prices is the only thing that matters to customers. Advertising is littered with ideas that embody customers mindset on prices: "low-priced but stylish", and "slashing prices" have become the trademark of many U.S. advertising campaigns.
	Unlocking Additional Profits in Private Banking: A Case Study in Securities Pricing The UK Private banking sector has been through some tough times, high levels of competition, increasing regulatory costs and adverse market conditions have all contributed to the need for strong cost cutting, and consolidation. Despite a significant growth in the numbers of high net worth individuals, the personal nature of the relationship between the private bankers and their clients has not lent itself to the same degree of cost economies sought by the retail banks. This relatively high cost to serve poses a unique challenge to the sector which can only be addressed by maximising the revenue potential where possible. What levers are available to private banks in this competitive services market?
	Riding down the Cost Curve: High Impact Pricing in the Payments Business The German payments market is undergoing a structural change as the usage of payment instruments has changed heavily in Germany during the last 5 years.
	Power Pricing in the Private Banking Sector The private banking sector is still quite healthy. The question is, for how much longer? In fact, the digital age is presenting traditional banks with a colossal challenge. The information transparency offered by the Internet together with a host of new competitors spawned by it, have begun to erode traditional sources of revenue. Innovation and well thought out marketing strategies are increasingly the most important factors for profitability. Moreover, only banks that are sufficiently profitable will be in a position to afford the ongoing high cost of the information technology which is essential to success in the new economy. Indeed, capital markets will punish banks that have poor cost-to-revenue ratios with low valuations, making them easy acquisition targets.
	Strategies against Price Wars in the Financial Service Industry As many industries, the financial service industry –specifically in private banking - is currently in a ”price war”. Competitors battle it out with one another using price as their weapon. At the same time, however, they fail to differentiate their products or services sufficiently. This price war leads to enormous value losses. But why do price wars develop? And what strategies can financial institutions pursue to end, or even avoid, a price war?
	Powerful Pricing Processes: How to exploit Profit Potentials Hidden in Effective Pricing Processes This year most British banks announced all time profit records from their operations. However, taking a closer look at these numbers reveals a much differentiated picture across the individual business segments. In many cases, foreign activities as well as investment banking are very strong. Domestic retail banking, however, contributes to only a small part of the banks’ profit. This article focuses on pricing processes as effective measures to improve margins and aims to encourage top managers to pay more attention to the profit potential hidden in the field of pricing.
	Profitable Growth for Investment Companies - Exploit the opportunities of intelligence pricing and optimised sales incentives European capital investment companies are currently in a difficult situation. Following the disappointing performance in recent years during which the majority of customers have had to accept sensitive losses on their securities account, the long anticipated resurgence in the market is still being awaited. Although in 2004 the industry was able to collect about £130bn of net inflow this figure is still well below the level of 2002, when customer confidence was at an all time low after the burst of the internet bubble.
Channel Management
	Channel Management The introduction of the Euro and the anticipated growth of electronic commerce are forcing companies to rethink their European strategies. Many multinationals have formed internal ‘Euro teams’ to examine the pricing and administrative problems these events will create. But these teams are rarely asked to examine distribution strategy.
Chemicals
	How to increase your margins effectively By consistently differentiating the prices of the products according to their value and by strictly defining and steering customer discounts according to their value to the business.
	Price management: An executive duty Management has to face up to its sales force's criticism. They must provide more security and orientation when setting prices for products and customers.
	Pricing professionally Analysis of current pricing practices in companies reveals that they are mainly experience based and lack empirical validation. Is pricing therefore badly executed? The answer is YES!
Consumer Electronics
	Putting Pricing on Fast Forward - Getting the Price Right in Consumer Electronics Maßgeschneiderte Konzepte sind kostenintensiv. Ist jedoch der Wert eines jeden Kunden bekannt, werden sie nur dort eingesetzt, wo sie sich lohnen.
Consumer Goods
	Smart Profit Growth with Pharmaceutical Consumer Pricing Pharmaceutical companies are faced with many challenges such as fewer product launches and declining product differentiation, intensified competition and increasing sales of generic drugs. Prices are under pressure due to health policy reforms or public opinion. Furthermore, payments by health insurances and decision power of physicians are decreasing. All these facts lead to an increased patient empowerment, i.e. patients face high co-payments or pay out-of-pocket for OTCs. Thus, consumer pricing aspects are becoming increasingly more important for pharmaceutical companies.
	Market Survey: Profit Excellence In The Luxury Goods Industry The luxury goods industry is a benchmark industry in terms of brand building and quality management. High margins are achieved compared to mass market and discount industry segments. However, do these margins reflect the full profit potential of the industry? Are luxury goods companies successful in price implementation? Is the luxury goods industry a benchmark industry in terms of profit excellence? To answer these questions Simon-Kucher & Partners has conducted a global survey among leading luxury goods manufacturers.
	The Profit-Orientated Category Manager - How to Optimize Pricing in the Mail Order Business To unlock additional profits in mail order trade, category managers have to be turned into price managers. All they need is the support of intelligent tools.
	The Value of Emotions - Pricing for Luxury Goods The luxury goods industry is back on the growth path. This offers companies the chance to optimise not only branding, positioning and distribution, but also to maximise profits by setting the right prices. Simon-Kucher & Partners has developed a luxury goods pricing framework to professionalise price management for luxury goods companies.
	Pricing for Ingredients Today international ingredient manufacturers focus on capturing raw material access and participating in the industry consolidation. Nevertheless, maximizing profits not only by achieving economies of scale or backward integration but also by setting the right prices can bear unexpected profit growth potential.
Engineering
	Opportunities for Engineering Companies - Understanding the Customer Engineering companies in the UK but also beyond have to integrated three areas into their strategies in order to ensure long-term growth: stronger focus on innovation, export growth, and optimised pricing and pricing processes.
Insurance
	Pricing of UK Insurers Lagging Behind - Results from an International Benchmarking Study A recent Simon-Kucher study comparing five European countries and the US reveals that insurers waste profit due to a lack of competencies in customer-oriented pricing. Other countries demonstrate how to achieve significant growth through intelligent pricing. Insurers’ pricing in some countries still lags far behind!
	Multi channel strategies in an online era "Insurer's online business is growing. The trick will be to both foster the full potential of the online business, whilst also profitably adapting the offline business. Yet the insurance industry is not fully prepared. Online businesses remain immature. The article puts forward the major online business growth drivers and discusses measures to fully develop the on- and off-line business potential."
	Profitable Growth: Manage Your Pricing or Lose Money Insurance companies are simply not experiencing any profit growth. A recent study by the Credit Suisse First Boston of the world’s largest insurance companies listed on the stock ex-change paints a sobering picture: in the international profitability ranking, not one of the European insurers is listed in the top 20, and their market capitalization is equally weak.
	Professional Pricing - Room for Improvement in the Insurance Sector Pricing has the highest impact on profits in the insurance industry. Although pricing outweighs improvements in costs or expansion in volume easily, managers focus on cutting costs or growing volumes. The authors report alarming results from a study in the insurance industry: Insurance needs to be fundamentally improved by integrating a market perspective in a mostly risk-driven environment.
Logistics
	Discounting in the CEP Industry - The Discrepancy between Theory and Reality Anyone who analyzes the exisitng discount structures in the CEP industry will encounter quite systematic discount guidlines.
	Escaping the Air Cargo Bazaar - How to Enforce Price Structures Price wars have in common that hardly anyone ever wins and almost everyone loses a lot of money.
	Pricing Opportunities for Freight Carriers: How Pricing Can Increase Revenue and Profits for Freight Carriers Freight carriers frequently make the mistake of passing on cost advantages to the customer instead of retaining the earned margins.
	Realising Profit Potentials in the Car Rental Industry The current profit situation for most car rental companies in the UK is by no means satisfactory. Why is this? On the one hand, such factors as increasing car fleet costs (a weaker used car market, deteriorating purchasing conditions from manufacturers) and on the other hand the drawn out price war between the car rental companies are to blame.
	Pricing Mistakes in the CEP Market: Lost Profit Despite a drop in margins, optimistic forecasts are giving transportation and e-commerce experts a reason to expect enormous profit increase for distribution specialists in the courier, express and parcel markets (CEP market).
	Profit Pressure in the Cargo Industry Despite a drop in margins, optimistic forecasts are giving transportation and e-commerce experts a reason to expect enormous profit increase for distribution specialists in the courier, express and parcel markets (CEP market).
Marketing-Mix
	Pricing Where is it heading? Pricing has traditionally played a tactical rather than a strategic role. Most companies based their prices on cost-plus considerations or competitive comparisons, not concrete strategic goals. But the role of pricing is rapidly changing.
	Power Pricing in the Private Banking Sector The private banking sector is still quite healthy. The question is, for how much longer? In fact, the digital age is presenting traditional banks with a colossal challenge. The information transparency offered by the Internet together with a host of new competitors spawned by it, have begun to erode traditional sources of revenue.
Media
	Revenue Increase for Book Publishers Book publishers have traditionally not focussed on optimising their pricing strategies. But improving price setting, understanding value-to-customer of different books, better price implementation/discount strategy and channel differentiation can significantly increase publishers' gross revenue and profits.
	Pricing Strategies for Magazine Publishers Publishers of magazines have significant opportunities to improve their bottom-line through optimised pricing on two fronts. First, sales price elasticity in the market is often unknown and prices consequently not set optimally. Second, advertising prices have never been systematically optimised (e.g. price differences between formats/sizes). Further profit potential exists in a broader use of a cross-media platform.
Pharma-/Life-Science Industry
	10 Indispensable Characteristics of a Successful Pharmaceutical Pricing Function How should pharmaceutical companies organize their pricing structure and process in order to fully exploit their profit potentials? A new study identifies the industry's benchmarks and shows that even the best-in-class companies can further optimize their pricing function.
Software
	Profits: Pricing for Software distribution Most companies do not realize their products´sales and profit potentials because they do not exploit pricing opportunities.
Sports / Entertainment
	The Admission of Price. What is Wrong with Sports Tickets? When you think of the ‘big business’ of sports, forget about television contracts, souvenirs, sponsorships and jerseys. The economic glue of professional sports all over the world is still the ticket.
	Price Optimisation for Cinema Exhibitors In order to maximise attendance, revenues, and profits by successfully increasing the average ticket and overall revenue per visit, as well as by triggering new incremental demand, cinema exhibitors need to embrace the opportunities in optimal pricing, especially in the areas of price differentiation and bundling.
Telecommunications / Online Buisness
	Make Money with Services For many mobile network operators, MMS (Multimedia Messaging Service) is one of the biggest sources of hope for increasing ARPU within a short period of time. The start already looks very promising: Vodafone Group just published a statement that 200,000 MMS are sent by their German customers weekly, which sums up to about 2 Euro additional ARPU per month.
	How to win the WLAN game Wireless LAN has increasingly become the hot topic of discussions thanks above all to the uncertain future of UMTS. The ways established telecom companies have tried to understand and to take advantage of this opportunity, however, could not be more different.
	Mobile internet The German government’s auction of UMTS licenses was so costly that it will make the carriers’ current business models unsustainable. Most business models on the Internet are already questionable, and many have already collapsed.
	Selling content online Selling content online Making money from content on the internet is the business world´s equivalent of cold fusion: a really fun idea which - while theoretically possible has yet to be proven.
	Goodbye flatrate Flatrate pricing is a temptation many corporate managers find hard to resist. And why not? It makes life much simpler. A flat rate is easy to communicate, easy to understand, and easy to plan around. It is also economic nonsense.
	E-Commerce We are not trying to dismiss or underestimate the market potential of E-Commerce, as people have shortsightedly done in the past with breakthroughs such as personal computers and wireless communications. E-Commerce obviously has many important uses and benefits.
	Selling music online Distributing music files has quickly become one of the Internet’s largest and busiest consumer markets, as Napster’s community of 38 million users will proudly attest. And why not? Bertelsmann CEO Thomas Middelhoff was right when he said that music – more than any other media content – is predestined for sale over the Internet.
	Selling music online (Version 2) When Napster made the headlines a year ago, it turned online music distribution into one of the most hotly debated issues in the news. In the months since the publication of our widely cited white paper ‘Selling Music Online’ in October 2000, the five major record labels - and the resulting media attention - have focused primarily on the legal issues surrounding Napster and MP3.com ....
	Strategy forum In less than a year the term ”E-Business” has disappeared from the vanguard of corporate strategy, dragged down by lingering uncertainty about whether it will trigger the vast but unpredictable change it promised in the late 1990’s.
Tourism
	Bargain Airline Pricing. How Should the Majors Respond ? Can an airline offer flights for next to nothing and make a huge profit out of it ?
	Pricing in the Swiss Hotel Industry Knowing how critical pricing is for a company's profit situation, you would expect that pricing is given a particularly high priority in the hotel industry.
Trade Fair and Exhibition Industry
	Challenges for the trade fair industry The European trade fair industry is experiencing a period of turbulence. As traditional markets are stagnating and new competitors emerging, trade fairs and exihibition companies are looking to international expansion for additional growth. We show you what this means for marketing and product strategies as well as organizational structures.