Is Your Pricing Strategy Leaving Money on the Table?
Article by Industry Week
If you have taken a marketing class, you will for sure know about the 4 Ps of marketing: product, packaging, place and price. The 4 Ps have been around for over 50 years and have been widely adopted in most organizations. The key word here is “most.” In the industrial and manufacturing world, one of the P’s is highly neglected. Many firms manage their marketing strategy without having a declared pricing strategy, a formal price management process or a focus on pricing discipline. This is why I often say that pricing is the orphan of the industrial marketing mix.
In 2011, Kevin Mitchell, president of the Professional Pricing Society, was quoted saying that only 5% of Fortune 500 US firms had a dedicated pricing team. This number was a guess-timation based on attendance to pricing events and participation in social media groups related to pricing. Since then, this number has been widely used to depict the level of adoption of pricing in large organizations across the board.
To set the record straight, I wanted to investigate the penetration of the pricing function in large U.S. industrial firms and answer the following research questions:
1. How many U.S. industrial firms have a dedicated pricing team?
2. How many U.S. industrial firms have dedicated pricing roles or titles?
4. When firms have dedicated pricing titles, what are the types of titles?
5. What is the size distribution of these pricing teams?
Why are these questions so important? They are critical for multiple reasons that I list below.