Client Success > Pricing & Margin Management

Client Successes: Pricing & Margin Management

Client Base

Client Type: Major lubes company

Issue:

How to enter high-value niche markets in industrial lubricants with a “total-maintenance-package” concept

Approach

Screened a number of niche sectors such as cement mills, paper mills, and others in order to assess the specific requirements and factors for success. Using CVA, we identified the attributes in a lube supplier that are most valued. We examined the business models of a number of participants and the ‘‘traps” to be aware of. We assessed the purchasing patterns of maintenance managers and the interest in a “total service package” and were able to select a number of end-use sectors where our client’s offering had high chances of success

Kline Solution:

Client is pursuing the identified opportunities

 

Client Type: Global consumer and B2B marketer

Issue:

Our client’s B2B business was lagging its industry leading consumer product business. Changing the marketing program and product portfolios have not improved results. After several down years, it was clear that a new plan was necessary

Approach

Kline carried out a value-based segmentation program on the B2B business, dividing it into six segments. It became clear to the client that only customers in three of those segments were attractive to them

Kline Solution:

Due to the new segmentation, Kline’s client was able to focus its products, promotions and pricing where it could be successful. In the subsequent two years, there was marked improvement in the business and the allocation of assets.

 

Client Type: Global lubricant additives company

Issue:

Our client was seeking a better understanding of value added by distributors in lubricant value chain

Approach

Kline assessed value creation by analyzing gross margin for distributors across US and Canada. Recruited a panel of distributors and conducted primary interviews about distributor behavior, business practices, and supplier-customer relationships across value chain

Kline Solution:

As a result of the insights developed by Kline, our client was better able to understand the competitive landscape, including gross margin determination and distributor business practices. We painted a very clear picture of the profit drivers for ‘house-brand’ vs. major brand product lines

 

Client Type: Global Energy Company

Issue:

The Pricing Team of client needed an improved, fact-based, pricing strategy. The team shared a short-term target to improve results and needed a clearer view of the field execution of the pricing strategy

Approach

Kline conducted a pilot of pricing survey groups and provided a clearer view of market conditions relating to pricing. The follow-on project involved a wider rollout of the pilot program to gather more detail on various dimensions impacting price including volume

Kline Solution:

As a result of the insights developed by Kline, the client was able to get a better appreciation of true market pricing for its products in the pilot region based on additional dimensions of price gathered for this study. Furthermore, Kline recruited a new region to understand the regional variations in price. Hedonic modeling by Kline helped provide an additional tool to help extrapolate regional variations in price based upon statistical inputs

 

Client Type: A Regional Petrochemical Company and Refiner

Issue:

How can a new competitor sell at as low a price as they have set in the marketplace

Approach

Re-analyzed the clients cost position for the targeted mineral oil and solvents. Examined competitor’s feedstock position and its impact on cost position. Analyzed the competitor’s cost position from the competitor’s point of view. Examined how the competitor’s mineral oils and solvents business related to main line diesel and gasoline businesses

Kline Solution:

Kline discovered that the target company practiced a very different allocation approach for its cost than was typical. Client changed is pricing policy and began to purchase wholesale quantities for redistribution as a result

 

Client Type: Key regional petroleum product marketer

Issue:

Our client has a change in its business both in the asset and the organizational structure of its business. After several down years, it was clear that a new plan was necessary

Approach

After looking at thousands of actual transactions, a deep dive showed that there was virtually no correlation between size of customer, price, and discount in key categories. This was a symptom of how the client managed pricing and its brand positioning

Kline Solution:

As a result of the insights developed by Kline, the client understood – at the SKU and product level – where the opportunities existed to install better price management approaches and to deliver multi-million dollar improvements to earnings