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Pricing challenges often start with the conflicting objectives of each functional organization. The factory needs steady product demand to maximize machine throughput; sales focuses on maximum sales dollars to meet quotas and increase variable compensation; and finance desires efficient profit generation to please Wall Street. Pricing influences a company’s delivery against each of these objectives, but in many companies, no one is accountable for integrating and optimizing pricing decisions and activities. Pricing for value requires that companies build sustainable cross-functional capabilities to effectively set and capture prices. Elements of pricing for value include: developing the optimal pricing strategy, implementing effective pricing processes, measuring and controlling price at the transactional level and aligning technology with pricing processes.
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