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Adhesives Manufacturer Pricing Strategy Case Study

Industrial Adhesives Manufacturer Simplifies Pricing Discount Schedules to Improve Margins 5.14%

The Problem:

A leading industrial adhesives manufacturer had an established discounting program that had evolved over several years and a number of product lines. Legacy pricing for older products, combined with the introduction of newer products, contributed to a confusing pricing structure that was also difficult to manage. Additionally, customers were confused over the rationale to qualify for various discount levels, making an often uncomfortable situation for the sales team.

The Solution:

Price Point Partners price consultants conducted and in-depth statistical analysis to create a new pricing grid that greatly improved the pricing architecture through new pricing tiers, more consistent price basis amounts, and a more logical discount structure.

The Results:

By creating a new non-linear pricing grid, the company was able to simplify pricing structures while improving profitability. Sales generated using the new pricing structure resulted in a 5.14% improvement in margin, despite the fact that some prices were lowered.