Pricing is still too much guesswork for European companies, study proves

A European Pricing Platform (EPP) study shows that pricing is still a lot of guesswork for many European companies.  Most companies overestimate their pricing maturity level. That way, they lose a considerable revenue. 

The 2013 European Pricing Maturity study represents the opinions of 121 pricing executives from different companies and industries across Europe. They were surveyed by means of an online questionnaire (the Pricing Maturity Indicator). The questions are designed to indicate the level of pricing maturity of an organisation by evaluating the performance across the elements of the EPP Pricing Framework.

Most companies  are stuck on the first level of pricing: the price list maintenance. They'll sell any goods or services to any customer at any price. Some corporations have reached level two, transactional control. At this level, the right goods are sold to the right customers at the right prices. This is achieved by means of a number of successful margin optimisation projects. Rare are the enterprises that reach Full Value Capture (level 3). This involves greater segmentation of the customer base and seeing overall solutions at value-based prices. Here, the pricing process is fully integrated in the commercial organisation. An absolute minority of companies has reached level 4, Profit Optimisation. This includes rethinking the solutions and revenue model in order to capture more value for the customer and increase profitability for the company.

Pol Vanaerde, EPP president: "Pricing, one of the most important sales and profit drivers, spans multiple business areas and functions, including sales, marketing, finance and product management.  Unfortunately it is not always equally well integrated and managed. European companies would benefit from investing in developing their pricing maturity.  They will perform better in their markets, capture more value from their innovations and increase their profitability."

Pricing is still handled in an immature way by most companies. There is a big contrast in the different kinds of the industries. High Tech respondents have the highest actual pricing maturity. 43% already work on level 3. Machinery and equipment, the most represented industry in this study, have the most realistic perception of pricing maturity with the vast majority performing on level 2. The Fast Moving Consumer Goods and Retail on the other hand are working 100% on level 1. Their two biggest challenges lie in gaining control over discount practices and in making optimal use of the large amount of data gathered from customer transactions.

Pricing is a matter too serious to be handled by guesswork. It is too much regarded as a project rather than an embedded function in the commercial organisation. The power of pricing as a profit driver still seems to be underestimated. Therefore it is crucial for companies to invest in developing awareness of pricing across their organisation. Crossing the pricing chasm remains the biggest challenge for European companies and organisations.

Download the full report here.

For more information or to arrange an informal discussion on the issues raised in the EPP European Pricing Maturity study, please contact project manager, Nicolene Barnard : Nicolene.Barnard@pricingplatform.eu or Pol Vanaerde, president & founder of EPP pva@pricingplatform.eu.


Müller Martini Selects EPP Structural Partner Syncron Solution for Improved Service Parts Pricing

Stockholm and Zofingen, 17 October 2013 – Syncron International AB – Syncron, the supply chain and price optimization software company, confirmed today that Müller Martini has selected its Global Price Management solution to improve service parts pricing. Müller Martini aims to restructure its current parts pricing processes and capabilities as part of a strategic after-sales initiative.

The first phase of the project starts immediately at their Switzerland, Germany and the United States businesses, before a global rollout of the Syncron solution takes place to support over 30 company-owned sales and service locations worldwide.

Müller Martini searched for a solution partner that could implement best-practice pricing processes for its after-sales business, and importantly, could deliver a proven software solution that would enable them to operate a self-sufficient parts pricing process. Syncron was selected due the demonstrated results of its Global Price Management solution, their expertise in best-practice strategies for service parts pricing, and their ability to deliver on a global basis with a lower TCO. Other companies already running Syncron Global Price Management include Hitachi, Konecranes, Metso and Volvo.

“Parts pricing is a key feature in our strategy to become closer to the customer in after-sales and service, and being better placed to support their needs for aftermarket parts” commented Felix Stirnimann, Member of the Executive Board, Müller Martini Marketing AG.

“Few companies take full advantage of the opportunity that service parts pricing offers. Progressive companies like Müller Martini that implement sustainable price optimization solutions can achieve world-class after-sales and service businesses that delivers value to the company and its customers,” commented Christian Anders at Syncron. “We are delighted to work with Müller Martini and help them achieve their pricing objectives.”

About Syncron
Syncron is a global software company focused on supporting corporations in the manufacturing and distribution industries with leading edge, process centric applications to make significant improvements to customer experience and financial performance. Syncron’s ERP-independent software solutions for global inventory management, global price management, global order management and master data management are implemented faster and at lower cost than other solutions. Syncron has offices around the world. www.syncron.com 

About Müller Martini
Müller Martini is a global leader in developing, manufacturing and marketing print finishing systems and machines for variable size web-offset printing presses. Our objective is to meet our customers’ high demands by offering them innovative products and services in line with market requirements. Our extensive product and service offering ranges from variable-size web-offset printing presses, saddle stitchers, perfect binders, hardcover systems, and newspaper mailroom systems to state-of-the-art technology for manufacturing digitally printed products in saddle stitching, perfect binding or hardcover production. Müller Martini systems are developed and manufactured in ultramodern production facilities in Switzerland, Germany, China and the USA. www.mullermartini.com 

For more information, please contact:
Christian Anders, Sales Manager DACH, Syncron International AB
Tel: +49 89 99536770
E-mail: christian.anders@syncron.com 

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Media Contact
Daniel Aston, Syncron UK
Tel: +44 (0)121 503 2650
E-Mail: daniel.aston@syncron.com