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Discussion: Pricing discipline in a complex decentralized organization is a headache

ph.logo.sublogos.news.white-DISCUSSIONPricing Strategy & Optimization LinkedIn Group Discussion

Local managers may disregard central pricing recommendations. Moreover they may give a lot of latitude to their salesforce. The end result is chaos and far from optimal. All comments welcome! inspire me…

Top Comments

Wendy Wise

High Tech Marketing and Sales Strategist

I hear you. Have been there before. Does your group do the price setting? Or provide price/discount guidelines? Curious to understand the dynamics. Who do you report up to? Operations or finance? Are the local manager/sales selling well below recommended price levels? I found working closely with someone in a business unit, VP level or above and looking at revenue or margin targets, and then showing them how a small shift in pricing (and pricing discipline) can help them meet their quarterly targets – can get some buy in. Maybe focus on one group that seems most receptive and get a win?

Michael Fournier

Consultant / Founder at SGITR Consulting

In my experience, centralized offices should set overall pricing policy – and provide strategic guidance as to when discounts/adjustments should be made.

But local managers need to have some flexibility (within established boundaries or budgets), as they are closest to market realities and need to make real-time pricing decisions. Its also an important empowerment tool for the sales force and local managers.

Balaji Ramanathan

Optimization And Data Analytics Professional With Broad Multidisciplinary Experience

Pricing, in this day and age of savvy shoppers, should be thought of as more a science than purely an art. Pricing should be based on shopper behavior and shopper reaction to pricing decisions. This will determine which products should be used as “loss leaders”, which products should be used to enhance margin, etc. A scientific approach to pricing not only requires a centralized pricing organization, but also the implementation of a science-based price management and optimization solution that takes the emotion out of pricing.

Keith Maziarek

Senior Project Manager-Pricing and Strategic Initiatives

This particular topic strikes near and dear to my heart working in the legal industry at a global law firm which, as you may expect, is a partnership, and comes with all the challenges of trying to rein in a group of thousands of what are essentially individual business units to conform to a centralized strategy. I think the two key drivers that make the most difference in my experience are 1) incentives; and 2) moving people from awareness to understanding to acceptance. In my environment, nobody is required to do anything, but if you incentivize them correctly and simultaneously are making people understand the business case and embrace the benefits of utlilzing a centralized system, you’ll see the greatest incremental gains.

More Here: http://www.linkedin.com/groups/Pricing-discipline-in-complex-decentralized-2578129.S.216984127

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