ABeam Consulting Releases Results of European Strategic Pricing Survey

Neu-Isenburg, Germany, November 3, 2008 - ABeam Consulting, a global provider of operational consulting services, today publishes the results of a study on strategic pricing in Europe. The study, a joint initiative by ABeam, the European Pricing Platform and the Worms University of Applied Science in Germany, examined the pricing practices at 70 enterprises throughout Europe.

Michael Schneider, head of ABeam’s CRM practice in Europe and co-author of the study, explains: “When a company raises its prices, the expected consequence is a drop in demand. But how do some providers manage to improve their profit margins substantially while still keeping their sales volumes more or less steady? The answer is strategic pricing – a systematic approach to establishing and developing pricing strategies and systems.”

To find out how the most successful companies develop their pricing strategies, the authors of the study identified 70 enterprises that had made pricing a core function and asked these “pricing champions” how they approached the subject. The enterprises interviewed were all based in Germany or the Benelux countries and were primarily from the manufacturing industry.

Their pricing experts were interviewed extensively to understand how they apply strategic pricing and how this influences their corporate performance. In addition, a focus group of executives were interviewed whose companies have yet to develop a strategic pricing concept.

The study showed that a clear focus on strategic pricing will improve the profit margin without having a negative impact on the sales volume. Several enterprises actually reported simultaneous improvements of their margins and sales volumes. This effect can be attributed to a pricing strategy based on the purchaser’s perceived benefit (also referred to as value-based pricing).

Furthermore, the study revealed specific focal areas that can help improve the profit margin:

• Involvement of high-level executives: Pricing champions make pricing a top priority on the agenda of the board.
• Clear processes and responsibilities: Pricing champions make sure all stakeholders are identified and are constantly involved in the decision-making process.
• Distributed responsibilities: Pricing champions have assigned responsibilities to positions at various organisational levels. This reduces the need for centralised control while allowing stakeholders to act independently within their assigned areas of activity.
• Pricing specialists: More pricing champions have specialised teams dedicated to pricing. In most cases this is a cross-functional department that is in a position to co-ordinate the agreed-upon pricing initiatives more effectively and implement them more accurately.

The study is available for download on the ABeam website here.

About ABeam Consulting ABeam Consulting provides operational consulting services that create strategic advantage, improve business processes, leverage technology innovation, and enhance organizational performance for leading multinational and domestic companies worldwide. ABeam partners with clients to diagnose and solve their real challenges with solutions that combine industry and operational best practices with technical expertise. Pragmatic approaches ensure that clients gain measurable value more quickly. Headquartered in Tokyo, ABeam’s more than 3,500 professionals serve more than 700 clients throughout Europe, the Americas and Asia. For more information, please visit http://www.abeam.com.

About European Pricing Platform Founded in 2004, the European Pricing Platform (ePP) serves as the first network of pricing professionals and CxO-level executives in Europe. Through various workshops, conferences, trainings and webinars, ePP is dedicated to the development and sharing of pricing best practices, methodologies and effective technological solutions for successful definition and implementation of strategic pricing.

About Worms University of Applied Science With 60 full professors, more than 100 additional teaching staff and 3000 students from 25 countries, the Worms University of Applied Sciences (Fachhochschule Worms) provides an excellent learning environment. The University’s mission is to enable successful education through effective teaching, future-proof curriculum design, close cooperation with global corporations and creation of a positive academic environment.