pricing maturity report_postal and logistics industry
DESCRIPTION
With European postal markets opening up in 2011 and 2013, price will become one of the most important factors for customers when new entrants with similar service levels appear in markets. Discover how you can overcome your obstacles in this report!TRANSCRIPT
European Pricing Maturity2013Results and key findings - Postal & Logistics Industry
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Results and key findings - Postal & Logistics Industry
Together with respondents from the Chemicals sector, they have the highest perceived pricing maturity at 2,80, while reality paints a different picture with their pricing maturity being only 2,27.
However, they do have significantly more dedicated pricing team members at worldwide level (headquarter incl.) than the Chemical industry -- 40% of respondents have more than 15 persons working exclusively on pricing in their organisations and the same percentage have more than 10 years of experience in their functions.
All of them attach great importance to a proper big data analytics infrastructure and 80% find that a price optimisation strategy is an absolute “must have” business initiative.
Perceived pricing maturity 2,80 = LEVEL 2
Actual pricing maturity 2,27 = LEVEL 2
Ambition within 12 months3,12 = LEVEL 3
Postal & Logistics industry – observations
Highest perceived pricing maturity
Figure 1: Distribution of respondents within the Postal & Logistics industry
Figure 2: Distribution of respondents within the Postal & Logistics industry
Source : EPP European Pricing Maturity Study – 2013
Source : EPP European Pricing Maturity Study – 2013
Perception Reality Ambition
Level 1: Price list maintenance
0% 20% 0%
Level 2: Transactional control
20% 80% 60%
Level 3: Full value capturing
80% 0% 40%
Level 4: Full profit optimisation
0% 0% 0%
perception reality ambition
0%
20%
Level 1:Price List Maintenance
You try to sell anything to anyone at all prices
20%
80%
60%
Level 2:Gain transactional control
and optimize
You sell the right products to the right cutomers at the
right prices
80%
0%
40%
Level 3:Full Value Capturing
You sell segmented solutions at value based
prices
0% 0% 0%
Level 4:Profit Optimisation
You develop end-user solutions with different
revenue models
CHASM0%
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Results and key findings - Postal & Logistics Industry
With European postal markets opening up in 2011 and 2013, price will be one of the most important factors for customers when new entrants with similar service levels appear in markets (Kleindorfer & Szirmay, 2009). Below, we highlight a number of attention points and possible actions which arise from the gap analysis in Figure 3.
Conduct a price positioning exercise per segment and align with marketing strategy. Pay attention to responsiveness of consumers to fluctuations in price to help determine optimal pricing.
There seems to be a great need for the further development of pricing research tools within the Postal & Logistics industry. These tools need to provide insights on segmentation, value attributes, price perception, willingness to pay, and price elasticity in the very least. As far as tools are concerned, if we look at this aspect, together with the results of Monitoring, we see that though a wealth of customer data is gathered in this industry, but there is very little regular advanced analysis of this information. A reliable tool which integrates all sources of quantitative and qualitative data needs to be put in place for effective reporting, monitoring and price guidance.
Improve value selling skills of sales force, provide them with value argumentations per product line, across each segment. Don’t underestimate importance of the economic value calculation exercise in this.
Price policy & setting
Tools & Systems
Price execution
Postal & Logistics industry – gap analysis
Source : EPP European Pricing Maturity Study – 2013
Source : EPP European Pricing Maturity Study – 2013
Reality Ambition
Price Strategy 2,40 3,20
Price Policy & Setting 2,10 3,23
Discounting strategy 2,40 3,40
Price Execution 2,07 3,07
Monitoring 2,30 2,90
System & Tools 1,90 3,00
Governance & Org. 2,40 3,08
Tendering 2,39 3,18
Figure 3: Gap analysis: Postal & Logistics industry
Figure 4: Distribution of maturity scores across components of the pricing framework
TenderingGovernance & Org.
System & ToolsMonitoring
Price ExecutionDiscount Strategy
Price Policy SettingPrice Strategy
Actual PMI score
0.00 1.00 2.00 3.00 4.00
Gap with Ambition
0.790.68
1.100.601.00
1.001.13
0.80
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Results and key findings - Postal & Logistics Industry
Tenders are widely used in the Postal and Logistics industry (80% of respondents), and all respondents indicate that improvement is necessary. These are the 3 key areas they would like to focus on in the next 12 months:
How tender information is obtained: Information should be collected well before the tender, it should be checked and critically assessed by the commercial team and then actively used in pricing the tender.
How item selection for a tender takes place: Margin improvement alternatives should be identified and offered whenever possible.
The use of formal life time value calculation when evaluating tenders: Formal calculation needs to take place, taking all possible factors (e.g. account year-end rebates and bonuses of sales team, etc.) into account.
If you would like more information or to arrange an informal discussion on the issues raised in the EPP European Pricing Benchmark Study and how they affect your organisation, please contact:
Project Manager:Nicolene [email protected]
President & Founder of EPP:Pol [email protected]
Timely & complete information
Improve margin
Life time value calculation
Postal & Logistics industry – Tendering