Policy Publications is an independent research and publishing company which specialises in producing research reports that help managers develop world-class company performance.
"Pricing for Profit ...the Critical Success Factors" by Colin Coulson-Thomas
Pricing reviews could boost margins and market share report says managers should spend more time talking pricesThousands of companies could boost profit margins and market share if top managers spent more time discussing pricing strategy, says a new report.
Pricing for Profit... the Critical Success Factors found that companies with the most effective pricing strategies were better at achieving up to 13 different business objectives including increasing the sale of specific products and services and creating entry barriers for competitors.
The Chartered Institute of Marketing report, based on research in 73 companies with a combined turnover of more than £18bn, is published by Policy Publications.
It finds "a gulf" between a group of "leader companies" that use pricing policy to achieve a range of business objectives, such as growing market share or making individual customers more profitable, and "laggard companies" with less successful pricing strategies.
Author Colin Coulson-Thomas, Europe's first Professor of Competitiveness and head of the Centre for Competitiveness at the University of Luton, says: "It is not that the leader companies suffer from price pressure. Rather, that they have discovered ways to manage that pressure, often using non-price tactics, so that margins do not suffer.
"By contrast, the laggards too often resort to discounting in the absence of other competitive leverage. They have less room for manoeuvre when setting and sustaining prices and their margins are under constant pressure."
The report is published at a time when many companies are facing their most intense price pressure ever. Continuing low inflation makes real price rises more visible. Global competition is forcing prices in many markets downwards. The introduction of the euro makes eurozone prices more "transparent".
The Pricing for Profit research looked in detail at 127 factors grouped into 10 areas in each of the 73 companies. By studying more than 9,000 individual pieces of data, researchers found that the leader companies' pricing policies are more likely than laggards to help achieve as many as 13 business objectives.
For example, while 63% of leaders are very effective at using pricing to improve margins only 17.4% of laggards are equally effective. Similarly, 44.4% of leaders are very effective at using pricing to help them generate growth compared with only 10.9% of laggards.
Pricing for Profit... the Critical Success Factors includes tools to help companies improve their pricing management. There is a self-assessment questionnaire which lets companies compare their own pricing performance against leader companies. The report also includes a pricing process checklist designed to help companies construct a more effective pricing management process.
Professor Coulson-Thomas says: "Too often, pricing is the undiscussed subject in many companies. Senior managers need to take a fresh look at their pricing strategies in the face of unprecedented price pressures."
Pricing for Profit... the Critical Success Factors by Colin Coulson-Thomas is a CHARTERED INSTITUTE OF MARKETING report published by POLICY PUBLICATIONS in association the CENTRE FOR COMPETITIVENESS, LUTON UNIVERSITY, price £99.
Chartered Institute of Marketing: The Chartered Institute of Marketing (CIM) is the world's largest professional body for marketing. With over 60,000 members, CIM delivers marketing excellence worldwide. CIM's mission is the delivery of world- class professional support for marketing professionals. CIM provides access to quality education, training, membership activities and the opportunity to maintain and develop relevant professional skills in an increasingly competitive market-place. CIM is the only marketing organisation able to award individual Chartered Marketer status to eligible members.
Policy Publications: Policy Publications is an independent research and publishing company which specialises in producing research reports, briefings and other publications that help managers understand emerging business issues and develop world-class company performance.
Centre for Competitiveness: The Centre for Competitiveness is engaged in research and consultancy activities to improve the competitiveness of corporations, companies, professional practices and small businesses. A theme running throughout much of the Centre's work is the achievement of competitive advantage and the generation of new income streams through the more effective creation and exploitation of information, knowledge and understanding.
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