You are here

Industry-Relevant Pricing Strategies

Body: 

When manufacturers and distributors are planning an effective industry pricing strategy, they often are focused on the price point of a product. While price setting at the product level is important, there are other considerations to be made beyond the price point. One such consideration is the pricing environment within the industry that you reside.

Understanding the factors within an industry that can impact pricing is critical to success. Specifically, knowing price levels of industry participants, being able to predict price changes and even influencing them in a favorable direction is crucial to maintaining a healthy economic balance. The inability to manage prices at this level can result in industry price wars or at least downward price pressure. The goal is to achieve industry wide pricing conduct that supports sustainable profit margins.

In order to excel at this level requires an understanding of supply, demand, costs, economic trends and technology trends that impact the overall industry pricing performance. Most companies miss the opportunities in the industry pricing strategies due to a lack of data and information on the previously mentioned factors. 
 
 
For example, one of PricePoint Partner's clients, a manufacturer of specialty tapes, missed an annual price increase announcement by the pricing leader in the industry for several years before realizing that industry prices were rising on a regular and predictable basis. (Click here to read more about the manufacturing pricing expert case study.)
 
Assigning someone to regularly gather industry pricing information is a good starting point to improve your industry pricing strategy. Then, assemble a team to review the changing information on a quarterly basis to ensure that you maintain an effective industry pricing strategy for your company. You may be surprised at what you learn.