Internal pricing department with scarce resources. No internal transfer price management, Product Innovation with quality perception problem eroding true value. Lack of a pricing waterfall, price realization metrics, or true share of wallet knowledge.
Action Taken
Embraced lack of pricing management capability, and no sales discount discipline, thus designed a digestible and trackable improvement plan. Phased sprint approach was utilized to create:
Created pricing scenario models with commensurate Pricing Ladders to demonstrate market and value appropriate discount levels,
Price sensitivity analysis by OEM: Dealer:End-Consumer, to assist in the design of price bands
Competitive intelligence and product value mapping to forecast financial impacts across the entire business… where, when and why to win
Benefits:
Realigned the product portfolio to market expectations, resulting in a large price adjustment to fit value/benefits to the dealer network and the end consumer
Complete overhaul of the discount and exception process, reducing exception discounting by $6.2 million
Additional initiatives added to sustain growth trajectory in parts accessories and consumables, this optimization lead to an additional $1.2mm in margin without sacrificing volume
$5+ Million in incremental return in the first year for the manufacturing business units
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