What keeps you awake at night?

Nicolene, our content director for AMAN 2014 has listed some of the key themes which pricing professionals from the Aftermarket and Manufacturing Industry shared with us. Can you identify with these statements? Do you have your own challenges you would like to see discussed in Amsterdam. It’s your Forum, contact us and we'll make it happen.

Every EPP Forum is developed for and by the attendees. We dedicate a lot of time and research to have a clear view of the most recent challenges in the Aftermarket and Manufacturing Industry. We talk with people who are in the field every day and know very well which issues are hot. Nicolene, our content director for AMAN 2014 has listed some of the key themes which pricing professionals from the Aftermarket and Manufacturing Industry shared with us. Can you identify with these statements? Do you have your own challenges you would like to see discussed in Amsterdam. It’s your Forum, contact us and we’ll make it happen.

“Though the market as a whole is in a slump, until this year, the decline in automotive sales meant a slight increase for us in aftermarket activities. People drive their cars longer, so they use more spare parts and need more service. Now that the market is picking up again, so the aftermarket will most likely decline. Add to this competition from low-cost countries and from the dealers themselves, and we have a challenging year ahead of us. How do we ensure that we keep our market volume when the market volume itself is declining?”
- an automotive aftermarket manufacturer

“How do we, as OEM manufacturers, ensure that we capture the full value of the opportunities presented to us by advances in technology, specifically telematics? We are always improving our offering… faster, better, smarter… how do we translate this added value to our pricing? How do we respond to large Aftermarket distributors who are now also competing for the commercial market?”
- a premium automotive manufacturer

“We work hard to hedge the impact of energy, metal and other commodity prices. How do we get more value out of our value chain, and how do we translate that to pricing?”
- a machine manufacturing firm

“Our machines need to be able to quickly adapt to diverse packaging requirements, small batch sizes etc. Customers demand energy efficient processes with reduced material use without compromising functionality. Traceability and comprehensive documentation are of utmost importance. We need to improve our value communication by focussing on issues that matter to our customers. How do we know what they are willing to pay for these features?”
- a food packaging machinery manufacturer

“Demand from developing countries increased while demand here in Europe dropped. This is great, but we are not geared towards pricing for these countries. Our pricing is determined at headquarters here in Europe in an attempt to eliminate country prices which vary too much. Isn’t it better to allow some form of local pricing power besides discounting? In India, for example, a deal is hardly ever closed without a 30% discount off list price… is this because they expect a discount regardless of price or because the price is too high? Should we consider some sort of hybrid between a global and local pricing structure?”
- a global machine manufacturer

“Our company has just undergone a major restructuring, let’s just call it downsizing. My pricing department has been cut back to a small team. My major challenge now is to re-establish the baseline. We need to check to make sure that our pricing strategy and processes are aligned to the new structure. How can I get maximum efficiency out of a much smaller team?”
- a medtech manufacturer

“We have moved from a business unit centric to a region-led strategy. In developing countries, we are shifting away from high price point western design to a mid-price point product approach in order to better serve these markets. Has anyone else been in the same situation? How did they handle it?”
- a machine tool manufacturer

“Due to legislation and funding cuts, we see our customers following one of two distinct paths: large high-yield commodity farming vs. specialised smaller scale farming. We need to start focussing on offering solutions including services which are valued by these two separate segments. This is new for us. Where do we begin? How do we move from selling everything to everyone to a more segmented, solutions-based approach? How do we effectively communicate our value to these two groups? What will they be willing to pay?”
- an agricultural equipment manufacturer

“How can we counter the growing threat from Chinese competition? What part can pricing play? This year a large Swedish state-owned mining group bought a new crusher for it’s open-pit mine from a Chinese supplier. Usually their supplier was one of the two European market leaders who supply more than half of the global market for underground mining gear. How do we stay ahead of the lower priced, but comparable or improving quality competition?”
- a mining equipment manufacturer

“One of my biggest headaches is internal politics. Sometimes this steers us away from the best interests of the company, it erases all rationale. Often there are more important things than pricing, and our projects get moved to the side. How do we increase visibility at top management level for what we do and what we are worth?”
- a medtech manufacturer

“Sometimes short term objectives such as reaching minimum sales targets in terms of volume take the upper hand. This is clearly not aligned with our goal of profit maximisation. I guess it’s a trade-off, sometimes volume wins, sometimes margin, depending a lot on the country… but how can we embed profit maximisation into the company culture? How do we change peoples’ attitudes towards pricing?”
- a building industry manufacturer

“How do we increase the perceived product quality in order to lead to higher willingness to pay? What actually leads to higher willingness to pay – is it only higher product quality, is it better aftersales service, is it stronger value communication, what about the effect of a second price point? Will more features help?”
- an automotive manufacturer

“The nature of pricing for aftermarket parts and services vs. pricing the actual core product of a company differ significantly. Amongst others, aftermarket handles more SKU’s than manufacturing; it delivers people, parts and infrastructure, as opposed to raw materials or finished products; it has to deal with reverse logistics of failed parts, which is per definition a foreign concept to ‘new business’. However, if these two distinct business could pay attention to a more cohesive way of working together, there are so many opportunities to be found. Precisely for this reason, our company recently appointed a pricing director overseeing both aftermarket and core products. How can we leverage the synergies between ‘new business’ and ‘aftermarket’?”
- a construction equipment manufacturer

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