The Business Challenge
The client, a well-established fast food company in Sweden, was facing predicaments in sustaining their profitability for the last few years. Their belief that the company’s pricing strategy was incorrect was making them highly skeptical of implementing new pricing initiatives. However, the new top-level management realized the power of competitive pricing and approached SpendEdge to leverage its competitive pricing solutions to enhance ROI.
Companies in the market need to formulate better competitive pricing strategies to stay competitive in the market. Get in touch with our experts and know how competition based pricing can help your organization to achieve better savings and gain higher profit margins.
The pricing experts at SpendEdge performed a detailed analysis of the pricing opportunities of transactional and value pricing models to spot quick opportunities. They adopted a research methodology that consisted of qualitative and quantitative data collection techniques to help the client implement a pricing strategy with confidence.
In a span of 12 weeks, the experts implemented a competitive pricing strategy to capture the interest of customers willing to spend on their products. They quantified buyer personas and selected a price that their customers were willing to pay. Also, the competitive pricing strategy ensured that they didn’t increase the prices of the products with the highest margins. Instead, they reduced the sourcing costs of raw materials for these products by identifying suppliers offering better prices. Furthermore, they analyzed the pricing models to figure out the key factors driving the prices of the company’s offerings.
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The competitive pricing analysis engagement helped the company to raise the prices of their offerings by an average of 3% across the country. This resulted in a 31% increase in the overall savings of the company. Discovering regional variations in pricing helped the client to identify cost-saving opportunities and make prudent business decisions.
What is Competitive Pricing?
Competitive pricing is a strategic process of pricing the company’s products or services in accordance with the competitors in the market. This is often done by businesses selling similar products as the attributes of the products remain similar. Also, competitive pricing takes into consideration factors such as the product’s life cycle and the stage of the product.