Proactive price and margin management is becoming increasingly important, on the one hand to benefit from the willingness to pay and on the other hand to counter the price pressure caused by volatile raw material markets, raw material costs, as well as costs for logistics and labor. Dynamic pricing approaches are needed here. Last but not least, the growing price transparency is a major challenge for established price systems. We support companies in the construction supply industry and retail trade in dovetailing their corporate and pricing strategy. In order to develop the full profit potential of pricing, a clear objective, a coordinated approach and targeted action on the market are required. Without a strategic compass, the price in the operational hustle and bustle of day-to-day business is often based on situational actions. Clear strategic guidelines should therefore be set for pricing, especially in the construction supply industry. These include the desired price positioning, the price role in the market and the selection of the strategic price model (gross price system vs. net price system) with which one wants to operate in the market.
Changes in prices and conditions are always highly sensitive interventions in a “living object”. With an intensive analysis of the price environment, we create certainty about the timing and the extent of price changes – whether as part of the annual price adjustment or as part of larger planned changes. The price environment analysis provides information on whether the current environment is favorable to the planned changes and also provides arguments for implementing the measures.
For a systematic price environment analysis, we use four central building blocks:
Pricing is very multi-facetted in the construction supplier sector. In addition to the selection of the correct method (cost-plus-pricing, competitive pricing, value pricing, dynamic pricing), the continuous application must be ensured in the pricing model. List prices in isolated value pricing projects are often value-oriented and the portfolio is meticulously trimmed to value consistency and yet this work is then nullified by discounts and bonuses that are granted in an uncoordinated manner in day-to-day business. Success in pricing and the desired margin effects can only be ensured through a holistic approach. We support you in pricing, especially in the following areas:
The result is what counts: 5% announced and “only” 2.5% enforced – so how healthy is your price enforcement power? Any price system is only as good as the consistency with which prices can be enforced on the market. The ability to enforce prices depends on market structure, price communication, negotiating skills and sales incentives. We support companies in the construction supply industry in particular in the following areas in order to improve price enforcement:
There are few topics that allow such a direct measurement of success as pricing. Our proven pricing software solutions and pricing tools enable regular price analyses across all relevant dimensions of the business model as well as the transparent simulation of price adjustments to key performance indicators. We ensure the highest process efficiency via direct interfaces to our customers’ ERP systems. Automated test and data cleaning algorithms guarantee the high data validity and reliability of our analysis results. We ensure optimal control with relevant key figures (KPIs) and cockpits.