Published on: Mar 4, 2016
Transcripts - Price-Align-Case-Study
A global medical supplies manufacturer started to see a slow-down in Europe with a 3-5% drop off in
sales revenue across 3 of the top 5 markets.
There were little or no changes showing in volumes at the top level so we needed to explore possible
causes with some initial analysis.
With anecdotal evidence coming from sales staff focused on contracting economies and increased
pricing pressures the first challenge was to understand the actual drivers of this performance and how
to adapt to the new economic environment.
Pricing for Growth
Price Align’s initial review revealed that the
sales decline was almost all from price
erosion across most European markets -
reaching 5% annually. A complex pricing
environment was mostly responsible due
to; a lack of consistency between markets,
large numbers of channels and channel
conflicts and the growing power of buying
It was also identified that a number of
customers were cutting back volumes, while
sales staff were overcompensating on price
as a result.
Price Align Approach
After uncovering this initial insight from visual variance and customer portfolio performance analysis
we set about further investigating the underlying trends:
Short evaluation interviewing key people on pricing process and policy in each country
Assessing individual sales territory performance
Price, volume & mix variance and pocket price analysis to understand pricing dynamics and trends
Figure 1: VVA on performance across customer groups
in each region
Pricing based customer segmentation
European pricing risk model to manage the most extreme price
Rigorous data driven processes to create and review pricing rules
to communicate targets and floors.
After this preliminary set of diagnostics and analysis we were now ready to implement the optimal
changes identified. The project team were able to establish pricing teams in every country, including
representatives from sales and marketing, through to customer services and commercial.
With these cross-functional peer groups established, Price Align’s pricing tool was deployed in a pilot
scheme and rolled out to 2 of the top 5 countries to see if the changes in behaviour would be
Outcome – Price Align Web Platform
The web-based pricing tool handled all pricing activity across European markets guaranteeing
consistent processes, strategy and pricing rules across regions. The tool linked with the client’s
multiple ERP systems giving them a single view of complex and wide-ranging data.
Figure 2: Price Align sample pricing grid
Once a deeper understanding of the culture of pricing was gained we embarked on a pricing journey
together by integrating:
The pricing tool enabled the client’s core new pricing strategies to be implemented and become a
daily part of their pricing process:
Pricing Based Customer Segmentation
Targets and Floors
The pilot alone helped to arrest the decline in sales revenue, with the added increase of 2% on
FY2010 performance in FY2012. Price Align has now been fully rolled out by the client to over 400
users across 12 countries.