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Price Performance and the Profit Equation

Nothing has more impact on profit margins than pricing actions. Yet, most companies don’t measure price performance and how it impacts margins. Price performance is the difference in prices across items sold multiplied by the number of units sold in a given time period. So, an item that increased in price by $1.00 and had […]

Setting Strategic Pricing Goals

In nearly every business there are performance goals of many varieties. Consider sales goals, cost reductions goals, margin goals, production goals, quality improvement goals and the list goes on. Rarely do we see a company with pricing goals. That is, using pricing as a strategic initiative to improve revenues and profit margins. For many manufacturing […]

Writing GREAT Price Increase Letters

So you have a price increase initiative coming up, and maybe you are a little anxious about writing a letter to your customers announcing it. That’s understandable. After all, you don’t write these announcements every day. Price increases occur only occasionally and, like strategic planning, it’s hard to master something without routine practice. There are […]

Lead, Follow, or Get Out of the Way with Price Increases

Does your industry have a clear pricing leader? That is, does one firm tend to make price moves and industry participants follow? If you are lucky, your industry works this way. If you are a price leader you may already know the benefits of this role. You can set the pace for price increases in […]

Why Knowing Your Competitors Prices Misses the Mark

We were recently approached by two companies looking to identify the prices of their competitors. Each of these companies were manufacturing firms that produced made-to-order products. One was a forging company and the other a plastic injection molding company. Management of these firms believed that if they knew the hourly rates of their competitors they […]

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