Industry

Software, Internet, Tech

Company Profile

  • Company specialized in B2B direct sales of business equipment
  • Group revenue >€1bn
  • Pilot implementation covered 40,000 SKUs in three countries

Situation and Objectives

  • Client's market shares declined.
  • Price-aggressive competitors plus increased price trans-parency put pressure on margins and revenues.
  • Pricing approach and assortment breadth did not allow for systematic and differentiated price adjustments.
  • Competitive situation, profitability and customer value not reflected in price lists.

Approach

  • Structured pricing approach balanced competitive pricing with value-based aspects as well as a pragmatic yet differentiated approach to adjust prices for the "long tail" of products.
  • Focus items: Cornerstones for price image from customers' perspective. Competition based pricing for these products, differentiated by country.
  • Core items: Products with largest revenue share. Value-based price structure for these products to reflect customers' willingness to pay.
  • Long tail: Differentiated price increase approach combined with additional automated rules and constraints.
  • Approach allowed client's pricing managers to optimize prices for masses of products without having to work on a SKU level.

Results

  • Web-based application used by pricing managers.
  • Software combines proven best-practice approaches and customer-specific features. Constant client involvement in the development process ensured that the software ideally fits the client's organization, processes and strategy.
  • Thanks to our visual approach and intuitive user interface to develop price structures, our client derived quick-wins and gained a holistic view of the assortment.
  • Efficient and convenient approach that also increased price consistency within the group: Central creation of structures for core products that can be transferred to other countries, and local price adjustment options to react to market characteristics.

Impact

  • Tailor-made approach embedded in an easy-to-use software
  • Stronger price differentiation to improve competitive positioning, price image, and margins
  • Better alignment of prices between different countries and at the same time flexibility to adapt prices according to the strategy and market environment
  • Increased efficiency in the pricing process