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Profitability Management and Pricing

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.

Getting Pricing Right

Getting Pricing Right: The Value of a Multifaceted Approach
It should be straightforward enough: set prices according to the mathematics handed over by the pricing analytics team, and revenues will increase. Too often, however, intervening factors defeat the wisdom of the number crunchers, suggesting that pricing capabilities are something broader.

Profiting from a recession climate

Profiting From a Recession Climate: Effective Use of Transactional Price Management
At the onset of an economic downturn, a company’s traditional reaction is to focus on controlling costs, retaining its largest customers and hoping to ride out the storm. At best, this is half a strategy.

Pricing, Pricing, Pricing: The New Bottom Line in Real Estate

Pricing, Pricing, Pricing: The New Bottom Line in Real Estate
An effective transactional price management can drive real, short-term margin improvement to help address the current economic conditions in commercial real estate.

 
Learn more about this practice

Dig Deeper

  • Unlocking M&A’s Pricing Potential
    Unlocking a transaction's true potential.
  • How Price Sensitivity Can Make or Break Your Profits
  • Burden of Proof: A Skeptic’s Guide to the Value of Strategic Pricing
    Actionable steps to consider in formulating a pricing strategy.

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