The price is right ... But is the execution wrong?
Executives at consumer products companies are facing a tough environment with huge pressures to deliver topline revenue and margin growth in mature and static markets where the principal retail customers are both consolidating and driving real prices deflation in many categories. Additional requirements to manage costs but deliver innovation and brand investment highlight the urgent need to manage pricing effectively. A 1% improvement in the price you achieve can generate up to a 12% increase in operating profit for a typical consumer products company, where other factors remain constant. For companies with poor pricing performance, that improvement can be even more dramatic. So why are so many consumer products companies struggling to translate this opportunity into reality, especially when business leaders say that pricing pressure is their top concern?