Only 37% of participants said they were not involved directly or indirectly in a pricing war, although 57% of participants confirmed that price pressure has increased in the last year. Our recent Simon-Kucher study explored the experiences of companies in the area of pricing. Communication with customers and competitors will be essential for anticipating their expectations, while communication within the organization will ensure there is no confusion and everyone is pulling together. Having pricing at the top of your management agenda, as well as measuring it, monitoring it and communicating it, is crucial. The importance of keeping pricing on your management agenda For example, technological advances within the pharmaceutical industry mean a successful continuation of price increases for patients. They are willing to pay a premium over competitive products if new and driven by industry-specific innovation. Specialization and Innovationīoth are quintessential in determining your pricing power, as they bring added value to the offering table for customers-especially early ones. For instance, e-commerce company Zoom has managed to achieve a 115% sales growth CAGR on stock price over the past 3 years. The ability to control your distribution chain will also make it much easier to pass on any higher costs in production. The stronger your brand value, the higher your prices can become. In the words of Ralph Lauren’s CEO, who expects 17% price increases, “you’re bringing in a younger, higher value, and less price-sensitive consumer who can absorb the increase”. We see quite a few success factors that contribute to high pricing power: Strong Brand ValueĬonsumers may become loyal to a brand when they see value in it, and this can discourage other companies from entering the market, protecting the brand’s own market share. How can we arrive at such increased amounts?īy understanding pricing power, companies can determine whether they can raise prices without suffering a decline in volume.Are the proposed figures high enough from a business perspective?.
0 kommentar(er)
