The "Value Before Volume" Pricing Strategy: so Easy and yet so Hard
Dr. Axel Heitmann, the former CEO of Lanxess AG, famously made “Value before Volume” the central tenet of his company’s pricing strategy. The idea became a driving force when BAYER AG divested its commodity chemicals business in 2004 and Heitmann took control of the new company, called Lanxess. Within eight years, he pulled off what analysts referred to as “mission impossible”: he created a DAX company, increased revenue by a third, doubled the operating margin, and quadrupled the share price.
Dr. Karl-Heinz Sebastian and Dr. Andrea Maessen were eager to speak to Dr. Heitmann, who was named Entrepreneur of the Year in 2006 and continues to advocate of the “Value before Volume” strategy. The two partners from Simon-Kucher met with him in Hamburg to learn the strategy’s true essence, understand the internal and external resistance it faces, and looking back, what Dr. Heitmann would do differently.