Growing up in college, the four “P’s” of marketing: Product, Price, Promotion, Place were etched in our brains. I encourage you to make pricing strategy a top priority because SAP research found that pricing strategy for manufacturers significantly influences profit margins.
Obviously, pricing too low leads to costly stock-outs and margin erosion. Likewise, pricing too high leads to lower revenue and excess inventory. Optimizing your pricing strategy can be tricky, though, particularly with longer sales cycles and the increased uncertainty in supply chains.
Add rising costs of labor to the mix–manufacturing wages rose 4.9% in June 2021–and you see why revenue optimization matters so much in today’s market. That’s why I encourage you to spend extra time thinking about pricing as you set up your marketing plan and budget for 2022.
Pricing optimization combines market and business data to improve business margins. It comes down to making intelligent trade-offs to create a competitive advantage. Through careful monitoring and accurate analysis of data, you can thread the needle with pricing strategies that retain customers and increase profits.
Stock-outs not only lose you sales in the short term, they can result in lost customers.
When it comes to strategic go-to-market planning, bringing-in partners who know about pricing strategy for manufacturers gives you an edge. Internal data from your customer management platform and other sources also play into profitable decision-making. Here, at StratMg, partnering with you to get the most from market and business data is what we do. I invite you to get in touch to have a conversation about your 2022 strategic marketing plan.
Image credit: SAP research report