Many companies recognize the importance of having multiple business strategies in place for how they will approach the market. Do they want market share, or do they want to be the prestige brand? Are they trying to launch new products and/or sunset others? Each business strategy requires the tactical plans in place to execute, and therein lies the need for mixing up your pricing strategies.
Why is it that many companies recognize the need for multiple business strategies, but then execute through one or two “tried and true” pricing strategies? Each different market approach can be achieved through different pricing strategies, but with vastly different results. If your brand is positioned as the “prestige” brand in the market, don’t expect the same pricing policies that keep that image in place to work for market penetration. The same can be said for the typical commodity markets – applying value based pricing to those products in those markets simply will not produce similar results to value based pricing for specialty products. Yet company after company will re-apply “proven” pricing strategies in new markets for new products, without fully analyzing all alternatives. And why is that? It’s not because they don’t want to; typically, it’s related to a company’s inability to project and forecast multiple strategies and manage them once they are in place.
This is where a robust pricing execution tool shines. The ability to forecast properly price changes using a library (meaning more than two or three) of B2B price strategies is invaluable. In addition, companies need to realize that since business is dynamic, so too must be your pricing libraries. A true price execution tool will allow for price change modeling using proven price strategies, but with the necessary tweaks to meet changing market conditions. And so, a new price strategy may be added to the ever-growing library for use elsewhere. The value of such a price execution tool is the reusability of what works, the elimination of what does not, and the proliferation of pricing success throughout the entire organization.