Pricing Strategies: Managing Prolonged Deflation and Cost Volatility

April 1, 2016

Global markets are facing prolonged periods of deflation, and many B2B company leaders are more closely considering the impact of that market dynamic on pricing and margins, especially as they are faced with increasing pressure from customers to lower prices. This leads to some very difficult questions, such as: “When do I need to start lowering my prices? How far do I need to go?” “For which customers and products do I need to lower price?” While holding onto price while costs drop can lead to more profits, it can be taken too far, leading to losses of customers, revenue and profits. 

While managing this challenge can be relatively straightforward, depending on your organization’s level of pricing sophistication, how can you be certain your pricing strategy is meeting objectives and delivering the desired results? Whether the cost change is a result of prolonged deflation, occasional spikes in cost increases or decreases, or regular cost swings, it’s critical to know exactly how effective past strategies have been at passing along changing costs to customers without leaving money on the table when prices are too low or losing business when prices are too high. 

In this whitepaper, we’ll discuss how advanced data science can provide predictive insights to help answer these tough questions across broad customer and product portfolios.

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