This Global Enterprise Improved and Centralized Their Pricing Strategies
Learn how this global leader in innovative technologies and lifecycle solutions for the marine and energy markets improved and centralized their pricing strategies.
Highlighted Business Outcomes
Centralized pricing control
Empowered the team to monitor, manage, and maintain pricing logic through a centralized solution
Increased satisfaction
Improved internal and external satisfaction with value-based, consistent, market-aligned prices
Driving a competitive edge
Refreshed pricing and global list prices in line with perceived customer value and the market
Overview
Aftermarket pricing, while important, was not the highest priority for this global manufacturer of solutions for the marine and energy markets. Over time, the aftermarket business unit became more central to the organization and pricing needs increased in urgency. Improving pricing quality was a necessity to make the aftermarket business more lucrative.
The Challenge
The global manufacturer’s pricing was originally cost-based, with limited understanding of the value, marketplace acceptance, or competition. Inconsistency in the structure also plagued the system as customers may be under and overcharged for similar products. This led to many risks including pricing that was too high, creating difficulties for sales team members and risked customer trust, and pricing too low, meaning lost revenue and a potentially damaging shift in market perception.
The lack of a central pricing team with pricing responsibilities scattered across the company, no clear methodology, or IT support meant multiple processes done differently by various pricing owners. Change only occurred if pricing owners implemented a new strategy. The global manufacturer recognized that a central pricing function was necessary in the organization to provide the right methodologies, direction, and tools.
Vendavo Pricepoint helps us create a sustainable process for value-based and market-driven pricing. This generates great value for the organization.
Pricing Specialist
Global Manufacturer of Marine and Energy Solutions
The Solution
The company knew that any approach to global price management would need to start with a baseline strategy and strong project. They first mapped business processes and historical pricing strategies in the globally distributed production sites. They moved away from cost-based pricing, and instead, built a strategy through value-based and market-driven pricing. In their case, spares would now be based on value vs cost. Pricing principles were defined, and more than 200,000 articles were grouped into categories and families.
The Results
Through Vendavo’s solutions and partnership, the organization set up consistent and well documented pricing principles, which serve as a solid platform for growth and continued business development. A team dedicated to pricing was formed consisting of many roles including a global price manager, divisional pricing managers, and analysts to carry out daily tasks. The centralized pricing is completely compliant with the new methodology and supports their long-term growth.
About the Global Marine and Energy Solutions Manufacturer
Overview
This global manufacturer of solutions for the marine and energy solutions is a major player in their focus spaces. Their goal was to create a sustainable process for value-driven and market-based pricing to create more value for their organization and customers.
Fast Facts
Industry: Manufacturing
Region: Global
Products used: Vendavo Pricepoint