How we helped a European leading manufacturer of the HVAC industry (Heating, Ventilation, and Air Conditioning) 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 commercial policy design.
  2. Designing the new commercial policy for the client.
  3. Calculating new prices, including MSRP, distributor list prices, specific client conditions, etc.
  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. We conducted extensive interviews with key stakeholders ranging from the CEO and Sales Director to client-facing staff. We combined these with field visits to meet with customers and retail partners of our client. Leveraging our expertise in the client’s value chain, we identified and highlighted major pain points associated with the current commercial policy and provided insights regarding best practices in our client's operating market. Based on these insights, we collaborated with the project team to define the ambition of the new commercial policy in terms of market share gains.

To challenge this ambition, we conducted a benchmark of the competitive landscape and built a comprehensive view of the value chain to assess current price positioning and identify market price levels as well as primary growth targets.

Simultaneously, we performed in-depth analyses of existing sales data to understand customer segmentations and corresponding pricing practices. The implementation of the new commercial policy presented an opportunity to establish a more favorable pricing scheme relative to competitors. 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.

Three-quarter of the sales are now done at zero discount

The new pricing policy and associated price lists have been successfully rolled out to all sales teams and distribution partners. Sales staff have regained confidence and radically changed their discounting practices by defending their prices more effectively. The rate of price compliance has risen from less than 10% to more than 75% (sales at list price with no discount). These changes not only enabled our customer to reassert its position as market and volume leader, but also enabled its sales staff to process business more efficiently and reallocate the time saved to prospect for new business and refocus negotiation on the product aspect.

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