European Pricing Maturity
2013
Results and key findings - Automotive Industry
Results and key findings - Automotive Industry
Automotive industry – observations
Price optimisation
strategy is essentia...
Results and key findings - Automotive Industry
Automotive industry – gap analysis
Organisation &
Governance
Price executi...
Results and key findings - Automotive Industry
Automotive industry – Tendering
60% of Automotive respondents filled in th...
of 4

Pricing Maturity Report_Automotive Industry

With sales in the automotive industry in 2013 at its lowest level since records began in 1990, according to industry association ACEA, there seems to be much more focus on pricing, not only at "finished good" level, but also on the aftermarket playing field. How is your company doing? Discover it here!
Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Pricing Maturity Report_Automotive Industry

  • 1. European Pricing Maturity 2013 Results and key findings - Automotive Industry
  • 2. Results and key findings - Automotive Industry Automotive industry – observations Price optimisation strategy is essential With sales in the automotive industry in 2013 at its lowest level since records began in 1990, according to industry association ACEA, there seems to be much more focus on pricing, not only at “finished good” level, but also on the aftermarket playing field. 77% have between 8-15 or more people responsible for pricing on a daily basis at worldwide level. 32% of respondents have more than 5 years of experience in pricing, but the biggest portion, 45%, have between 3-5 years of experience. The majority, 81%, agree that a specific price optimisation strategy cannot be missed in their companies and these same respondents are also convinced of the important role played by big data analytics. As if to strengthen this point, their maturity scores show that price monitoring and reporting emerges as one of the key areas on which they would like to focus during the coming 12 months. Figure 1: Distribution of respondents within the Automotive industry Perception Reality Ambition 18,18% 45,45% 0% 22,73% 45,45% 36,36% 59,09% 9,09% 63,64% 0% 0% 14,29% Level 1: Price list maintenance Level 2: Transactional control Level 3: Full value capturing Level 4: Full profit optimisation Source : EPP European Pricing Maturity Study – 2013 Figure 2: Distribution of respondents within the Automotive industry perception reality ambition 64% 59% Perceived pricing maturity 2,41 = LEVEL 2 Level 4: Profit Optimisation 9% Actual pricing maturity 2,18 = LEVEL 2 Ambition within 12 months 3,17 = LEVEL 3 14% 0% 0% 45% Level 3: Full Value Capturing 36% 23% 45% Level 2: Gain transactional control and optimize 18% 0% Level 1: Price List Maintenance You sell the right products to the right cutomers at the right prices C H A S M You develop end-user solutions with different revenue models You sell segmented solutions at value based prices You try to sell anything to anyone at all prices Source : EPP European Pricing Maturity Study – 2013 Page 2 of 4
  • 3. Results and key findings - Automotive Industry Automotive industry – gap analysis Organisation & Governance Price execution Monitoring Move to a situation where permission to overrule prices in the system is very limited, and controlled/monitored by price management team. Ideally, overrule authorisations should be reserved only for strategic pricing decisions at director level. Provide sales force with value argumentations per product(line), across each segment and decision making unit. Implement full and regular win/loss analysis and use it as input for new solution development. Ensure alignment throughout Sales, Marketing and Product Management by means of training on value pricing and value selling. Pay attention to ensure that discount structure does not trigger channel conflicts or grey markets. Eliminate unconditional discounts, replace by performance based incentives/discounts. A better view on competitor intelligence would bring the Automotive industry a step ahead according to respondents. Information should be systematically gathered, monitored and translated into corrective actions or changes in pricing policy where necessary. Translate this info into a competitor attack plan. Monitor the results of any price promotions, share it with sales and marketing and develop new promotions based on the insights gained. Figure 3: Gap analysis: Automotive industry Actual PMI score Gap with Ambition Tendering 0.71 Governance & Org. System & Tools 0.94 1.25 Monitoring Price Execution 1.11 1.23 Discount Strategy Price Policy Setting 1.08 Price Strategy 0.99 0.95 0.00 1.00 2.00 3.00 4.00 Source : EPP European Pricing Maturity Study – 2013 Figure 4: Distribution of maturity scores across components of the pricing framework Reality Ambition Price Strategy 2,18 3,17 Price Policy & Setting 2,45 3,41 Discounting strategy 2,03 3,11 Price Execution 2,00 3,23 Monitoring 1,97 3,08 System & Tools 2,23 3,17 Governance & Org. 2,09 3,34 Tendering 2,35 3,07 Source : EPP European Pricing Maturity Study – 2013 Page 3 of 4
  • 4. Results and key findings - Automotive Industry Automotive industry – Tendering 60% of Automotive respondents filled in the tendering section of the survey. Points for improvement during the next 12 months are: Improve margin Life time value review Move beyond the philosophy of winning the tender first (price to win) and then looking at opportunities to increase the margin within the agreed price. Respondents indicate that they want to focus on having a margin improvement plan per tender in place before actually submitting the tender. Build in regular account reviews to check the life time value of the tender. If you would like more information or to arrange an informal discussion on the issues raised in the EPP European Pricing Benchmark Study and how they affect your organisation, please contact: Project Manager: Nicolene Barnard Nicolene.Barnard@pricingplatform.eu President & Founder of EPP: Pol Vanaerde pva@pricingplatform.eu Page 4 of 4

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