In part two of this blog series, Zilliant Director of Professional Services Rick Chappel discusses globalization and the downward pricing pressure it's placed on U.S. manufacturers.
In some cases, executive management may not be aware of the severity of this reality that the pricing and sales professionals know all too well, they work in it every day! They need profits to put back into research to keep new IP flowing and maintain your brand. Absent a better solution, management teams direct pricers to raise the list price year after year, hoping some of the increase sticks. If you’re selling at single-digit multipliers to list, you’re in this situation. If you feel like you’re trying to get ever-higher margins from a decreasing pool of customers who are willing to pay, there’s a better answer.
A smarter, more market-aligned approach to pricing premium products that can nimbly change from region-to-region and account for differing competitive factors can help you get margin where possible, but also take more business off the street, by quoting faster at prices that win the business. Only then, can these companies start making the granular revenue and volume tradeoffs necessary to regain market share and hold on to pricing power where they can.
Speak Your Mind: When you think about the complex factors impacting your company, from globalization to commoditization, what action is at the top of your list to drive win rate, increase volume, keep plants busy, encourage distributor into-stock purchases and improve profit?
Seeking More Insight? Check out the whitepaper: When Costs Are Dropping, Should Your Prices Follow? Here’s a brief synopsis:
It never fails, does it? You finally pushed those price increases through — to reflect the fact that your input costs have been going up dramatically — and the market takes another turn. Input costs are now speeding in the opposite direction and your customers are expecting — or rather, demanding — price decreases. On top of that, overall demand has softened. If you are not in a highly-differentiated space with limited competition, you know that you will have a competitive fight on your hands. If you do not drop your prices, you risk losing critical volume to competitors who will. This whitepaper digs into thee critical considerations and impacts of responding to cost drops via prices in the market.