European Pricing Maturity
2013
Results and key findings - Chemical Industry
Results and key findings - Chemical Industry
Chemical industry – observations
2nd highest actual
pricing maturity
Respon...
Results and key findings - Chemical Industry
Chemical industry – gap analysis
Based on the gap analysis for the Chemical ...
Results and key findings - Chemical Industry
Chemical industry – Tendering
60% of respondents in the Chemical industry ma...
of 4

Pricing Maturity Report_Chemical Industry

The pricing managars who completed this survey, all have more than 3 years of experience in a pricing function, while 60% indicate that their teams worldwide comprise of more than 4, but less than 15 dedicated pricing people. Read the complete report on the pricing maturity within the Chemical Industry here.
Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Pricing Maturity Report_Chemical Industry

  • 1. European Pricing Maturity 2013 Results and key findings - Chemical Industry
  • 2. Results and key findings - Chemical Industry Chemical industry – observations 2nd highest actual pricing maturity Respondents from the Chemical industry believe that they have a somewhat higher pricing maturity score than they do in reality. In reality, they come second only to the HighTech industry in terms of the highest actual pricing maturity. The pricing managers who completed the survey all have more than 3 years of experience in a pricing function, while 60% indicate that their teams worldwide comprise of more than 4, but less than 15 dedicated pricing people. For this group of respondents, 60% indicated that they are convinced that a dedicated price optimisation strategy is a “must have” business initiative. 80% of respondents believe that Big Data Analytics will lead to higher profit margins. Perceived pricing maturity 2,80 = LEVEL 2 Figure 1: Distribution of respondents within the Chemicals industry Perception Reality Ambition 0% 20% 0% 20% 80% 20% 80% 0% 80% 0% 0% 0% 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 Chemicals industry perception reality 80% ambition Actual pricing maturity 2,33 = LEVEL 2 80% 0% 0% 0% 80% Level 4: Profit Optimisation Ambition within 12 months 3,28 = LEVEL 3 0% Level 3: Full Value Capturing 20% Level 2: Gain transactional control and optimize 20% 0% 20% 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 - Chemical Industry Chemical industry – gap analysis Based on the gap analysis for the Chemical industry, we have highlighted a number of attention points and possible actions that will improve pricing maturity of these components of the Pricing Framework. These are based on the widest gaps between actual and desired performance. Price strategy Price policy & setting Discount strategy Number 1 focus for the rest of 2013 needs to be pricing segmentation. Once the segmentation is in place, set specific pricing goals per segment (ideally also per product line, customer etc. where possible), and a targeted price positioning vs. competition. Use price/value maps (price positioning: perceived value vs. price) to steer portfolio and price strategy, pay attention to price elasticity, move towards a better understanding of value components per segment. Consider using pricing research to help with these aspects – this is highlighted again in the Tools & Systems section where a specific need for more attention to pricing research is expressed by the respondents. Though respondents indicate that the move towards a performance based discounting structure has already started or is at least on the table at the moment, the challenge will be in implementing it with the buy-in of the sales team, as well as the customers.. Figure 3: Gap analysis: Chemicals industry Actual PMI score Gap with Ambition Tendering 1.10 Governance & Org. System & Tools 1.00 0.84 Monitoring Price Execution 0.90 0.83 Discount Strategy Price Policy Setting 1.00 1.03 Price Strategy 1.15 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 2,45 3,60 Price Policy & Setting 2,27 3,30 Discounting strategy 2,80 3,80 Price Execution 2,27 3,10 Monitoring 2,15 3,05 System & Tools 2,10 3,10 Governance & Org. 2,68 3,52 Tendering 2,05 3,14 Source : EPP European Pricing Maturity Study – 2013 Page 3 of 4
  • 4. Results and key findings - Chemical Industry Chemical industry – Tendering 60% of respondents in the Chemical industry make use of tendering. Next to price strategy, this is aspect also represents the most prominent gap between actual performance and desired level of performance for the respondents. Timely & complete information Improve margin Critically evaluate info While it seems sufficient for this industry to have the final price decision resting with the sales director instead of collaborating with the pricing director, respondents do indicate that they need to work on making complete information about the tender (item line-level) available to decision-makers in a timely manner. Strive to offer margin improvement alternatives when possible instead of simply offering exactly what customers ask. They also want to move to a situation where information is collected well before the tender, and is checked, critically assessed and actively used in pricing. 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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