Your questions answered
Our answers to some of your pricing questions.
When would you consider taking a price increase?
There are many times when a price increase can be considered, however there are some times when it is most likely to be a success. For instance, when your brand is being further differentiated from it’s competitive set by strong marketing activities, along with it having a strong position with your customer, because it is delivering more profits to them. Having a team that is aligned to sticking to the planned move is also a key element for success.
We have recently been heavily discounting, how do we move away from this?
Review the current length, depth and frequency and see how all or some of these can be reduced, having both a short and long term plan. Invest in your brand and reduce the discounting as this is being done, you should get the volume upside at a higher price, as your brand will be better positioned with purchasers within it’s competitive set. Review your portfolio and outline which products benefit most from the current discounting and which don’t, this includes short term sales and long term, as part of this highlight which products will deliver your growth strategy and therefore require better margins.
What are the benefits of regular price reviews?
Suppliers get used to the fact that you will take a price increase at certain times, it won’t be unexpected. It allows you to increase your profitability if successfully implemented. Like everything else practice improves your skills, so the more you think and act on pricing, the more success you will have.