Leading Manufacturer: Successful Shift in Pricing Strategy

How did we help a European leading manufacturer of the HVAC industry stay ahead of the curve and protect their market share?

Our client, a leading manufacturer, faced multiple external challenges. Growing competition, significant market changes driven by shifts in government subsidies, inflation, and emerging technologies led to the erosion of their market share. This trend, compounded by increasing discount practices in frequency and intensity, put significant strain on their top line. They turned to BearingPoint for assistance in addressing these challenges.

We supported our client in four key areas:

 

1. Leading market strategy thinking upstream of sales & pricing policy design.
2. Designing the new sales & pricing policy.
3. Calculating new prices, including MSRP (Manufacturer Suggested Retail Price) and clients' specific conditions.
4. Facilitating change management for sales teams.

 

Our initial work involved a comprehensive assessment of current commercial and pricing strategies, considering both qualitative and quantitative aspects:

• Extensive interviews with key stakeholders ranging from the CEO and Sales Director to client-facing staff
• Field visits to meet with customers and retail partners of our client
• In-depth analyses of existing sales data to understand customer segmentations and corresponding pricing practices.
• Benchmark of our client's competitive landscape to built a comprehensive view of the value chain, and assess current price positioning vs. the market as well as primary growth targets.

Combining all those insights, we identified and highlighted major pain points associated with the current pricing & sales policy, which allowed the top management, along with us, to define the company's new ambition of the sales & pricing policy in terms of market share gains. 

After that, still with the client's teams, we designed a new pricing scheme, both more competitive and protective of the margin. Utilizing BearingPoint's simulation models, our client was able to project their business and identify the ideal market positioning. Through Optix, BearingPoint’s pricing software, we proposed multiple evolution scenarios to the client within a short timeline, each with corresponding price lists, discount waterfalls, and impact analyses (by product, market segment, and client). This enabled the project team and us to fine-tune the target commercial policy to ensure alignment with the objectives outlined during our collaboration.

The final aspect of our mission was to lead the change management efforts associated with the implementation of this new commercial policy, engaging both the client’s sales teams and key partners to secure acceptance of this new market strategy.