European Pricing Maturity
2013
Results and key findings - Machinery & Equipment Industry
Results and key findings - Machinery & Equipment Industry
Machinery & Equipment industry – observations
Most realistic in...
Results and key findings - Machinery & Equipment Industry
Machinery & Equipment industry – gap analysis
Monitoring
Tools...
Results and key findings - Machinery & Equipment Industry
Machinery & Equipment industry – Tendering
55,88% of respondent...
of 4

Pricing Maturity Report_Machinery and Equipment Industry

This industry is the most realistic, the perceived and actual value is almost a perfect match. Interestingly, they have also the most ambitions. Where do you stand with your ambitions and are they realistic? Discover it here!
Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Pricing Maturity Report_Machinery and Equipment Industry

  • 1. European Pricing Maturity 2013 Results and key findings - Machinery & Equipment Industry
  • 2. Results and key findings - Machinery & Equipment Industry Machinery & Equipment industry – observations Most realistic industry and most ambitious This is the most represented industry in the Q2 2013 survey of Pricing Maturity in European Organisations, with 28% of respondents classifying themselves in the machinery & equipment industry. Figure 1: Distribution of respondents within the Machinery & Equipment industry Perception Reality Ambition 29,41% 41,18% 5,88% 35,29% 52,94% 23,53% 35,29% 5,88% 70,59% 0% 0% 0% Level 1: Price list This is also the most realistic industry. Their perceived and actual pricing maturity is almost a perfect match at 2,06 vs. 2,08. Interestingly, they are also the most ambitions, with their desired end state after 12 months being 3,24. maintenance 5,88% of these respondents are already operating on level 3 of pricing maturity. They score quite high on price and policy setting, discount strategy, price execution and monitoring. Nonetheless, they are still striving to improve their operations across the scope of pricing activities in their organisations. capturing Half of all respondents in this sector, have global pricing departments with more than 8 persons. 56% of respondents have more than 3 years of experience in pricing, leaving a rather big portion of respondents with 2 years or less of pricing experience. Level 2: Transactional control Level 3: Full value Level 4: Full profit optimisation Source : EPP European Pricing Maturity Study – 2013 Figure 2: Distribution of respondents within the Machinery & Equipment industry perception reality ambition 71 % 0% 0% 35% Perceived pricing maturity 2,06 = LEVEL 2 Actual pricing maturity 2,08 = LEVEL 2 Ambition within 12 months 3,24 = LEVEL 3 6% 53% Level 3: Full Value Capturing 35% 24% 41% 29% 6% Level 1: Price List Maintenance Level 2: Gain transactional control and optimize You sell the right products to the right cutomers at the right prices C H A S M 0% Level 4: Profit Optimisation 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 - Machinery & Equipment Industry Machinery & Equipment industry – gap analysis Monitoring Tools & Systems Price setting 26% of respondents still work in Excel sheets with pricing knowhow dispersed in the organisation, while 53% have moved to more centralised price and discount grids, linked to the ERP system which means that specific price reports can be generated in addition to financial reports. All these respondents feel that a move towards a pricing software solution, fully integrated in ERP and CRM is a step forward. The pricing software needs to be managed by the pricing team and used by whole organisation for effective reporting, monitoring, price guidance and deal making. Similar to the Automotive industry, their biggest and most immediate challenge is to develop a system for their sales force to capture competitor intelligence effectively. In addition to that, they need to consistently measure effectiveness of price promotions. Ultimately their goal is to move away from price promotions towards value promotions to enhance value perception. Pay attention to understanding the value components per segment and use it to determine willingness to pay. Better manage unconditional discounts by moving to a performance based system, preferably with off-invoice discounts. Perform price elasticity analysis, even if only via transactional price data analysis, it is better than not doing this important exercise at all, as the case is now with 58,8% of respondents. Figure 3: Gap analysis: Machinery & Equipment industry Actual PMI score Gap with Ambition Tendering 1.03 Governance & Org. System & Tools 1.41 1.15 Monitoring Price Execution 1.22 1.17 Discount Strategy Price Policy Setting 1.15 Price Strategy 1.17 1.19 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 2,23 3,40 Price Policy & Setting 1,98 3,16 Discounting strategy 2,12 3,26 Price Execution 1,99 3,16 Monitoring 2,06 3,28 System & Tools 1,91 3,32 Governance & Org. 2,14 3,29 Tendering 2,24 3,27 Source : EPP European Pricing Maturity Study – 2013 Page 3 of 4
  • 4. Results and key findings - Machinery & Equipment Industry Machinery & Equipment industry – Tendering 55,88% of respondents make use of tendering. These are the main areas identified by them for improvement during the coming 12 months. Life time value Margin improvement alternatives Like most other respondents in this survey, very little attention is paid to the life time value of a tender customer. 47% of respondents do not measure life time value at all. In most cases (53% of respondents), item selection is based on an exact match with what the customer asks. Sometimes (21% of respondents), alternatives with better margin are available and known by the person selecting items, but not always offered. One of the goals within the next 12 months according to respondents is to make sure that these margin improvement alternatives are always offered when possible. 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

Related Documents