Creating a new pricing structure

Challenge

A large manufacturer offering tens of thousands of products through wholesale distribution was challenged with a largely manual and disjointed legacy pricing system. The issue raised was how to structure a rationally-based approach that would recognize market, competitive, product and other factors to craft a digital pricing system.

Approach

• Analysis
  • Hypothesized possible drivers of rational price differences.
  • Conducted survey-based conjoint analyses with end-users.
  • Analyzed product cost differences around key manufacturing and service elements.
  • Streamlined pricing around key drivers while aligning with existing prices.
• Process
  • Met with the salesforce and distributors to understand existing pain points.
  • Modeled impact by customer, market and product type.
  • Worked with product development, sales, finance, pricing and IT to develop a coherent, factor-driven pricing system that could be readily explained to customers.

Results

• Rationally-based pricing system suitable for digital delivery to wholesalers and readily updated through market, customer and other factors.