Challenges
Developing and implementing the right pricing strategy over the life cycle of product is central to long-term market success. A company’s pricing strategy must be set in the context of the broader marketplace (including customers, channels, and competitors), align with a company’s overall strategy and value proposition and provide a framework for future pricing decisions. In tough times, basic price management becomes more critical, as companies face customer-demand shifts and the threat of price wars. At the same time, customers may be more open than ever to new approaches such as bundling, value-sharing, pricing for performance, and matching price with their own economics. Managers therefore face a number of crucial challenges:
  • Adapting strategic approach to pricing in light of increased pricing volatility
  • Given declining demand, responding to or avoiding price wars
  • Spotting where the best—and fastest—opportunities are to make pricing changes and capture near-term value
  • Developing the best-in-class pricing capabilities
Our pricing service offering helps clients create value by developing market-back pricing strategies based on of the most relevant strategic, consumer, and economic considerations. Proven methodologies, targeted customer research, and advanced analytics support the strategic development process. We pull from a deep knowledge base of pricing-innovation work across various companies and industries, and we tailor our recommendations to the unique needs of each client’s business. Meanwhile, we build improvements in pricing capabilities (organization, processes, and metrics) that drive sustainable long-term value. Within Pricing, we cover a range of topics:
  • Pricing strategy
  • Pricing execution and tactics
  • Pricing capabilities and organization
Solutions
We approach pricing strategy by industry, market, product and transaction. We identify how customizing prices across markets and products can affect buying behavior and differentiate offerings. Working jointly with a client team, we identify pricing opportunities and build sustainable capabilities and repeatable processes to generate benefits today and tomorrow. We help clients achieve pricing excellence by identifying opportunities and issues that fall into three distinct but related levels:
  • Market strategy, where we look to understand how market structure, micro-economics, and conduct affect overall market price levels
  • Customer value, which creates an understanding of the pricing level and structure that best positions your offering against the competition so as to maximize the value captured in each target segment
  • Transaction level, where the exact price to charge each customer is set
We develop approaches and programs to capture those identified opportunities, and also work with clients to:
  • Craft the infrastructure—pricing processes, organizations, systems and tools, and performance management approaches necessary to support the pricing function in a business
  • Build client capabilities to sustain pricing improvement