Are You Getting Paid What Your Product Is Worth?

Manufacturers face significant challenges in today’s economic climate. Market share, plant capacity utilization, commodities costs, product versioning/bundling, channel conflict, customer discounts—all of these can needlessly lower the value of your product in the marketplace if not managed effectively.

Not only do manufacturers have to manage diverse elements of pricing, they must do so in a proactive fashion, integrating evolving price sensitivity, emerging customer value segmentation, and anticipated cost changes. It can be a dizzying experience just to keep all the balls in the air. This is especially true as all competitors source from low cost countries, adopt Lean processes, and reengineer their back office processes. Survival, let alone achieving competitive advantage, comes from leading a holistic process that not only understands how to create value for the customer, but how to monetize that value as well.

Surprisingly few businesses systematically address the question of value:

• What is the value of the innovation being delivered to the customer? Value here is defined as the net economic benefit for the customer: dollar benefits less cost of implementation.
• How differentiated is your perceived performance versus the next best competitive alternative? If the customer perceives that everyone can deliver positive net economic benefit the same way, then the innovation is more vulnerable.

There are a number of reasons for this:

• Benefits are not clearly defined for the selling organization:
  • ‘Our business call goes through contracting and all they care about is the lowest price’.
  • ‘The competition can do anything we can do’.

• Product managers cannot effectively articulate the value proposition or provide effective selling tools.
• There is not much focus beyond commodity cost recovery.
• There is no price premium at higher performance levels for a product due to a focus on the bundle or ‘job’ price.
• Pricing organizations cannot effectively mediate the disagreements, etc.

The challenge is further complicated by the realities of daily operations management.  The need to effectively understand critical profitability elements such as transaction price behavior and pocket margin creates a constant pressure to ensure the sales force is armed for success whereever possible.  Strategic considerations of product line price relationships, cannibalization, attribute/feature management, and forward looking sourcing requirements place a premium on rapid decision cycles, with less than perfect information.

This is where Transcend can help. We specialize in not only understanding and quantifying what your product is worth in the marketplace, but creating opportunities for you based on that knowledge. We bring cutting edge science and analysis, combined with years of practical, hard won experience to address your issues, and help you make more money. Whether it involves rebuilding your pricing structure, addressing issues of product complexity, product portfolio management, understanding customer and product profitability, determining a better balance between price/volume/share/capacity, or where you stand versus your competition, we can help deliver sustained improvements in profitability and cash flow.

Learn more here:Transcend Manufacturing Brochure-A , Transcend Manufacturing Brochure-B