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Rubber Company Pricing Strategy Case Study

Price Strategies Help Midwest-Based Rubber Company Boost Net Income 21%.

The Problem:

A leading Ohio-based rubber company found itself in a precarious position when sales volume was steadily climbing and fixed costs were largely under control, yet the company failed to realize profit goals due to rising material costs.

The Solution:

The only real option to resolve the situation was to consider increasing prices to regain the margins the company deserved. The firm hired Price Point Partners pricing consultants to assess the situation. Our pricing experts measured customers’ perceived value of the company’s products and discovered that perceived value was higher than actual price. Price Point Partners developed a value-based price strategy to improve price levels in a number of markets, including automotive and heavy truck. Our pricing consultants set price targets and worked with the sales and marketing team to communicate new pricing.

The Results:

The company achieved record profits — 21% improvement in income on an average price increase of 2.5% with no loss in unit sales volume.