Many years back, Falu Rödfärg manufactured paint pigment and sold it to other companies. Those companies used the pigment to produce and sell the paint “Falu Rödfärg” to retailers. The paint was often used as a loss leader and traffic generator in retail and had a very low price compared to other types of paint products. Falu Rödfärg had no control over the pricing and how the final product was handled in the stores. The profitability was decreasing.
Rather than letting other companies produce the paint, Falu Rödfärg started to manufacture the paint themselves. With help from PriceGain, they designed a new pricing strategy that better reflected the quality of the product and the brand promise. The goal was to gain more control of the handling and pricing of the end product, through direct sales and to specialized stores and handware stores. Through a more profitable pricing, the distributors incentive to charge the right price for the products value increased.
Falu Rödfärg gained both volume and margin and became a profitable company with a stronger brand name. In addition, the collaboration between distributors improved.
Over a period of 10 years, the leading Swedish media company MittMedia lost roughly 20 percent of its print circulation. To ensure profitability and turn the negative trend, MittMedia had to develop a new digital pricing strategy. The goal was that digital will be the company’s core business by 2020.
PriceGain worked with MittMedia to develop a new digital strategy based on its customers’ preferences and willingness to pay. The work involved a quantitative analysis that resulted in new subscription packages with digital as well as print contents targeted to different subscriber segments. With the new offerings and prices, MittMedia is well positioned to profitable capture the customers’ preference-shift from print to digital as the market evolves
The paper magazine has never been so cheap and at the same time as expensive as today, it all depends on who you ask. Changed media habits and new channels require more personalized pricing and packaging with new digital options and combinations.
In the development of a new digital strategy, VK realized that there is a need to understand how its customers want to consume content.
VK introduced a new product structure with more options that gives customers greater choice and flexibility to consume news, regardless of platform, in all situations of the day. The new structure and prices were developed through PriceGain’s Price Optimization. The price is based on the readers’ perceived customer value given price and cross price elasticity for all selectable product options.
VK managed to successfully package its offering and prices to increase profitability and reduce free reading.
Car-o-liner (COL) is a producer of alignment bench systems for collision repair of cars. COL was owned by Polaris Equity Partners that identified opportunities to improve COL’s pricing. An area of improvement was the channel pricing towards the company’s distributors. Distributors only had a few incentives to perform better and where not always happy with COL’s pricing.
With the support of PriceGain, COL developed and implemented an incentive-based channel pricing strategy that improved the relationship with the distributors but also increased the revenue and profitability significantly. The pilot implementation in the US market improved gross margin by 36% at the same time as volumes improved. The improvement gave strong support to Polaris when divesting the company with a high ROI.
The company had a broad offering, ranging from doors, to services and support and was one of the strongest brands in the market. The issue was that customers referred to low cost manufacturers when comparing prices on doors and to small local low-cost service companies when comparing prices for services.
The company developed a pricing strategy that linked the door pricing to the service and support pricing, making it evident for the customers that buying from a full range provider is beneficial rather than buying from the supplier with the lowest price on the individual parts of the solution. The company regained the competitiveness in the market.
The company offered three services to the music industry, one freemium, one entry level and one advanced. The objective was to grow fast and but at the same time become cash flow positive as soon as possible with the objective to divest the company at a higher price tag.
Through the analysis of the company’s pricing and the distribution of the current subscribers, a new even more advanced premium service was offered. The result was that many customers previously subscribing to the advanced service, moved to the new premium service but in addition customers previously subscribing to the entry level moved to the advanced.
The company had started its digital transformation several years earlier and had managed to transform its income from hardware mainly to a combination of hardware, software licenses and services and from a perpetual income to a significant share of recurring revenue. The company’s growth had however been flat during that period.
The company developed a global pricing strategy comprising a new modular value proposition, recommended retail prices (RRP), a new partner discount model, a standardized training and support pricing and tactical pricing initiatives that could better support the company’s effort to complete the digital transformation and to achieve growth.