Value-based pricing has developed a bad reputation and it’s understandable why.

Many posts on LinkedIn highlight poor applications of value pricing and they are right to point out the confusion it can cause when used incorrectly.

Distributors are under intense pressure. You are being squeezed from all sides. Costs have gone up across the board. Customers are demanding more for less. And your sales teams are doing their best just to keep the wheels turning in a volatile market.

The announcement of new tariffs by Donald Trump has sent shockwaves across global supply chains. While these policies are aimed at reshoring American industry, their ripple effects will be felt across the world.

Manufacturers invest millions in innovation, yet many fail to price new products for profit. The result? Lost revenue, eroded margins, and undervalued breakthroughs. Why? Because value and pricing is often treated as an afterthought.

In manufacturing, profit margins are under constant pressure. Raw material costs fluctuate, energy and labour costs rise, and customers push for better deals. Yet, many manufacturers hesitate to adjust their pricing, fearing customer backlash or even worse, loss of volume.

Many companies think of pricing as a one-time decision or a finance exercise, but in reality, it’s a strategic powerhouse.

I was working with a manufacturing company and the leadership team described themselves as innovators and technological leaders in their industry. But their margins told another story!

With rising operational and employment costs, and creeping inflation, businesses across the UK are facing significant cost pressures. Swift, strategic action is required to protect margins and maintain competitiveness.

When you’re developing a new product, is pricing the last step on your to-do list?

When it comes to pricing, there is a misconception that pricing is simply about raising prices or just setting the right price to achieve a certain margin expectation.

All customer needs are not equal and different customers will have different needs from your product and service.

There is a misconception that product commercialisation will automatically lead to monetisation. Many organisations assume that once they launch their new product, revenue generation will naturally follow.

Very often, when we speak about pricing especially within NPD, most people think that price is just a number, and they will typically focus on price setting days before launching their product. The truth is that very few businesses have a process in place to set and manage pricing.

Pricing is the most powerful profit lever a business has. It has the power to drive or destroy margins in your business very quickly. Yet, it is overlooked and undervalued by most businesses. Studies show that companies are spending less than 10 hours a year on their pricing!

In the changing landscape of modern manufacturing, navigating challenges like the pandemic, supply chain headwinds, cost pressures and inflation can be daunting. To stay ahead, businesses must uncover the hidden potential within their profit margins.

In the fiercely competitive world of manufacturing, where every penny counts, the art of Price Management holds the keys to unparalleled benefits. Imagine maximising your profitability, gaining a decisive edge over competitors and swiftly adapting to ever-shifting market dynamics.

Have you ever stopped to reflect on what pricing means in your business? For some it may just be a number generated in a spreadsheet based on costs but it means SO much more.

Price is value. Price encompasses so many opportunities to drive success and create value.

Have you launched a new product only to later realise that you under-priced it hugely and left significant money on the table? This happens a lot and to many businesses.

All customer needs are not equal and different customers will have different needs from your products and services. Geographically, prices will vary too depending on market dynamics and competitor landscape.

Very few businesses understand how much value their products create for their target customers.

VALUE CREATION is the foundation of any pricing strategy and requires a deep understanding of how products and services create value for your customers. Understanding value created by a product requires intimate knowledge of your customers’ needs. This deep understanding of customers’ needs translates your product’s FEATURE into a customer BENEFIT which then can be translated into a VALUE DRIVER.