Diagram of SEVEN modules:

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Starting Point

• Regulatory induced shifts in the market landscape
• Increased price sensitivity in some market segments

Brief

• Development of a market positioning strategy against other players to enable higher price points

Approach

• Investigation and analysis of the current landscape
• Identification of dynamic future scenarios through use of the PARTS* procedure
• Evaluation of possible strategies through game theory methodology in context of the identified scenarios

Results

• Clear understanding of the market, the players and the rules of the game
• Final positioning based on probable future market conditions

Starting Point

• Dynamic market with strong price fluctuations
• Differentiated products complicate a direct price comparison
• Strategic price positioning is required

Brief

• Design of a forecasting mechanism for

Approach

• Market and price level analysis (Prices are translated into a common reference price for comparability purposes)
• Identification and sensitivity analysis of the relevant factors
• Development of a forecasting tool
• Scenario analysis of possible future factor developments
• Formation of a strategy in light of the insights from the scenario analysis

Results

• Identified factors influencing the price level and their effects
• Dynamic and easily adjustable price level forecasting tool
• Probable price level for likely scenarios
• Pricing strategies for various scenarios

Starting Point

• Upcoming yearly price negotiations with major clients
• Mainly regional client portfolio
• Historically high margins suffer under increasing competitive pressure

Brief

• Preparation and assistance of upcoming price negotiations
• Explicit volume and margin targets  

Approach

• Optimizing the negotiation position through building up alternatives (i.e. sales channels to international business)
• Overview of the objectives of all negotiating parties (“Interest Portfolio”)
• Preparation of explicit storybooks for certain concrete negotiations
• Coaching and training of the negotiation team

Results

• Restructured client portfolio: regionally focused on high margin clients and building up of international sales channels
• All volume and margin targets fulfilled
• Enhanced negotiation skills of sales negotiation team

Starting Point

• Restructuring of sales from regionally defined responsibilities to an account / client oriented sales structure
• Lack of transparency concerning explicit transfer prices and profitability of certain clients
• Declining margins due to growing competitive pressure

Brief

• Transparent overview of the price waterfall and price spread in the market
• Set of rules for price setting at the sales level
• Synchronization of strategy, performance measurement and incentives
• Procedure to obtain and utilize relevant information

Approach

• Creating transparency
• Definition of pricing rules
• Translation of the pricing and distribution strategy into sales relevant KPIs
• Incorporation in the incentive scorecards of sales personnel
• Development of a process to collect and evaluate sales generated input and incorporate it into price setting

Results

• Price waterfall and price spread monitoring process
• Clearly defined pricing rules at the sales level
• Incentive compatible performance measurement of sales
• Utilization of relevant information from the front in central pricing process
• Margin decline was stopped and turned into an average increase of 20%

Starting Point

• Segmented market with pre-defined price boundaries
• Weak negotiation power against the retail level

Brief

• Design of a dynamic pricing mechanism
• Development of a pricing tool to support sales negotiation

Approach

• Analysis of the current product calculation
• Identification of the applicable pricing mechanism and relevant input factors
• Development of a pricing tool
• Integration of the tool in the distribution mechanisms

Results

• Transparency of cost structures and cost drivers
• Customized pricing mechanism
• Pricing tool to determine (potentially optimal) wholesale and retail prices
• Transparency concerning the effects of potential negotiation outcomes on the bottom line, to increase negotiation power
• Margin maximization