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Pricing pressures main concerns for EU companies!

October 12, 2011-

Courtesy of Financial Mirror


In today’s global economy, organisations are facing unprecedented pricing pressures as they deal with volatility in the commodities markets, currency fluctuations and unyielding international competition. To help mitigate the challenges, a number of world-class companies are turning to pricing software recommended by organisations from McKinsey, to Gartner and KPMG. In fact, both McKinsey and Gartner indicate that raising prices by 1-2% reaps margin increases up to 9%.

A recent survey by audit, tax and advisory services firm KPMG reflects these findings. In its annual survey of manufacturing executives from global companies, shows that almost 80 percent of respondents indicate they are cautiously optimistic about prospects for growth in the next 12 to 24 months.

Almost half (44%) of the survey participants believe that price volatility in raw materials and inputs remains the biggest challenge, followed by increased competition, pricing pressure and uncertain demand. EU companies in the survey noted that pricing and competition were at the forefront of their concerns.

To better manage volatility, KPMG respondents indicate they are reshaping their pricing models, with pricing identified as one of the key strategies.

“With recent strike action linked to demands for salary increases above inflation, increases in the price of electricity and other infrastructure, tolls and the slowdown in manufacturing output, this has put severe pressure on company’s margins,” said Gavin Maile, KPMG’s Africa Head of Diversified Industries. “Pricing is a powerful and proven strategy for improving top-line growth and profitability, yet few organisations know how to do pricing well.”

“As organisations navigate the challenges of raw materials and currency volatility, pricing remains at the forefront for many companies as they evaluate new opportunities to increase margins, market share and business agility,” said PROS Europe General Manager Wagner Williams. “The ePP’s Manufacturing PricingFuel Day will provide organisations with a fresh perspective on the power of prescriptive pricing with success stories that uncover its strategic value.”

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