Chapter 4
Price Execution
Strategy gets you on the playing field, but execution pays the bills.
—Gordon Eubanks
A team from ManuCorp1 completed a project to refine the company's pricing strategy. Part of its mission was to calculate list prices that would maximize profits based on current competitive dynamics and the products' core benefits and value propositions. Though the exercise had proved challenging and required a lot of resources, the leaders at ManuCorp were sure the investment would pay off once the new prices were realized in the market. After receiving the required approvals from Finance, the team sent its final price recommendations to the Sales Operations department to distribute to its field representatives.
When the new fiscal year began, the project team was called into the CEO's office for a meeting. The agenda was to discuss the recent decline in profitability of ManuCorp's products. The team was shocked. How could the firm have lost margin after implementing its carefully crafted new pricing strategy? With no recent changes in external factors (competition and costs), what could have prevented the new, scientifically derived prices from achieving their planned performance?
After some investigation, the CEO determined that several flawed internal processes and policies had contributed to the failure:
- Price distribution and communication was poor When Sales Operations received the new list prices from the project team, it should have entered them into the forms ...
