COSTING
Due to the so-called Cost-Plus Pricing approach that is very often applied in industrial settings, unfortunately the terms costing and pricing are used interchangeable although they mean something totally different. While price reflects the amount a customer is willing to pay, cost is the expense incurred for creating a product or service a company sells.
what we do
Based on your strategic priorities we develop a costing roadmap to answer your most burning questions. We dig into your data assets and together develop cost rates and cost allocation models which are integrated into transactional data bases fitting your needs. Using this information, we provide profitability analytics to drive strategic analysis and decision making, show the true cost/profitability at a product category or item level, and enable you to learn more about the true cost-to-serve and profitability of your individual customers.
- Cost accounting
- Product and service costing methods
- Cost and profitability models
- Data modelling
- Price / margin waterfall
- Visual analytics
Examples
- Optimized product costing tools for several European packaging manufacturers
- Developed a post-cost calculation and costing/pricing analytics tool for a multi-plant US based corrugated packaging producer
- Implemented a post-cost calculation for a flexible packaging manufacturer in the UK
pricing
Increase your profitability through superior pricing capabilities
Pricing is the most powerful and most direct driver for growth and when managed well can be a distinctive source for competitive advantage. It is strategic and requires building the right set of capabilities. Optimal pricing is not about charging based on cost but rather based on the willingness of the customer to pay. Perceived value can vastly exceed the cost of production, which is why it is crucial to set a price which captures as much of the difference as possible. Understanding the internal factors which influence price, as well as your customer’s value perception and willingness to pay are the basis for creating a customer-centric pricing culture which systematically maximizes price-driven profits.
what we do
Together with you we develop effective pricing strategies connected to your business goals and help discover the real value of your products and services in each specific target segment. We support you in creating a pricing infrastructure – from developing basic calculation logics, tools and pricing technology until training and coaching of front-line employees – that allows delivering prices to the marketplace and enables uncovering price leakages on transaction level. Once an infrastructure, the right organizational set up and proper static pricing approaches are in place, we take it a step further and move towards AI-powered real-time pricing that provides pricing decisions at scale on a highly granular level. We use data science and machine learning in customized list price setting, discount & promotion optimization and hyper-segmentation to identify willingness to pay in real-time. We deliver the right tools, knowledge, and trainings to develop processes and people in such a way that continuously identifying opportunities for margin improvement becomes part of your culture.
capabilities
- Price Performance Diagnostics
- Customer segmentation / hyper-segmentation
- AI-powered list price setting
- AI-powered discount & promotion optimization
- AI-powered Price simulation and identification of willingness to pay (value pricing)
examples
- Ran transactional pricing initiatives at several European packaging manufacturers
- Developed a pricing strategy and pricing tools for a European packaging company
- Trained >150 sales executives one-on-one on how to deliver pricing impact and size opportunities
