Smarter Pricing: How to capture more value in your market

4. Market share movement

The fourth indicator is holding market share. Sodhi and Sodhi (2005) describe how an industrial equipment manufacturer monitored pricing effectiveness with a monthly review. Vice-presidents of marketing, sales and finance, and their direct reports scrutinized pricing performance by region and transaction size. Specifically they looked for increasing average transaction value (to meet agreed internal objectives), fewer pricing exceptions to the scale of guidelines and finally to a maintenance of market share. If share is being lost to comparable competitors, then prices may be too high. If share is being gained from these competitors, then prices may be too low. An exception is where pricing is being deployed as part ...