“We really like your product, but it is too expensive. We have had quotes that are 15% to 20% cheaper. If you can match this, we would be interested in placing the order.”

This was the feedback our manufacturing client received from their customer and the customer was ready to show the quotes from other suppliers. One option could have been to go down the price discussion and price discounting route, but they didn’t have to.

When developing a new product, do you link product features to customer benefits and then do you estimate the economic value that your customer will receive?

You maybe wondering what this has got to do with pricing.

This is a very powerful approach that creates a line of sight between your product features and the $ economic impact on your target customers’ business.

How do you Estimate the price of new product and services?

The truth is that very few businesses have a process in place to set and manage pricing.

The 4Ps of marketing are widely known by lots of people in business. How much attention are you paying to the most powerful P – PRICE?

We are facing the worst levels of inflation in 40 years. Raw material costs are rapidly increasing as are energy costs and supply chain costs.

Input cost inflation is at the worst we have ever seen. Prices are changing the fastest most of us have ever seen. Is your Business equipped to deal with rapidly changing prices?

What factors do you consider when setting the price for your new product?

We are working with a client who is constantly receiving feedback that they are too expensive and that competition is selling at a cheaper price.

The Business Leadership team of a manufacturing company told us that customers saw them as innovative, technological leaders in their industry, first to market with new products, superior quality and supplier of first choice. Their website and brochures highlighted all these above points.

Many manufacturing businesses constantly find themselves talking about their pricing rather than the value their solution is adding to their customers.

Manufacturing companies are currently facing several challenges, including raw material price increases, volatile customer demand, limited supply or even shortages, supply chain instability, increasing cost-to-serve, just to name a few.

My manufacturing client was developing a chemical pump based on feedback from Sales that their customers needed this. Engineering set about designing a great product.

Let’s start with what strategic pricing it is NOT – it is not simply about raising prices or just setting the right price!

What strategic pricing is about is building a foundation for long-term profitable growth.

Having spent time, money and resource developing a product, businesses naturally want to shout out about and promote their product features. 

But what do your customers really care about?

Manufacturing has faced significant challenges in the last 12 months from the global pandemic to Brexit.

How do you know whether you should price your new product at £1,500 or £3,000?

For many businesses, price is just a number given to a product or service based either on cost-plus, market price or even a gut feel.  Price, tragically is an afterthought.

70% of new product launches fail! If you are developing a new product, how are you ensuring that it will be successful and profitable?

When developing a new product, do you evaluate the competitive alternatives? Your customer has choices and can buy from your direct or indirect competitors.

Setting the right price can MAKE or BREAK your business.