Manufacturing Today - Spring 2010 - (Page 20)

FEATURE BY RAFE VANDENBERG AND BARRETT THOMPSON Profitable Pricing Optimal Prices for Unique Goods /////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// M F G TOMORROW For companies that rarely sell the same product twice, dialingin the right price can be a significant challenge. Learn how one manufacturer’s approach reclaimed $40 million that otherwise would have slipped through the cracks. P ROFITIABILITY C ONTENTS G ROWTH G LOBAL C OSTS How do you figure out how to price a product you’ve never sold before and may never sell again? How do you determine the truly optimal price for a product that’s built-to-order or uniquely configured? This is a common pricing problem faced by many manufacturers of finished goods and OEM parts, in verticals as diverse as commercial lighting, power distribution equipment, packaging automation and industrial coatings. For many of these companies, their offerings are anything but standard and are built or configured to satisfy a customer’s unique engineering specifications. And given all of the variables involved, the con20 SPRING 2010 figured combinations that are possible can easily number in the thousands, if not millions. Of course, list prices and standard costs are rarely available for every possible configuration or specification. And there are very few, if any, examples of prior sales of the exact same configuration to a similar customer to provide any sort of intelligence or guidance about market price levels. As a result, product managers and sales teams end up operating without the usual guideposts for effective pricing – for the most part, they are flying blind. Profitability suffers due to all of the guesswork and the arbitrary rules-of- thumb that are created as workarounds. Customers and channel partners start to grumble and complain about the lack of consistency in the prices they are being quoted. And, because it takes so long to work through all of the issues and turn around a quote, close-rates are lower than they really should be.

Table of Contents for the Digital Edition of Manufacturing Today - Spring 2010

Manufacturing Today - Spring 2010
Global Strategies
Cost Concerns
Growth Opportunities
Continuous Improvement
Business Value
Juanita’s Foods
Les Plats du Chef
Gardner Denver
Smeal Fire Apparatus Co.
Club Car Inc.
Parkson Corp.
MKS Instruments Inc.
Amity Technology
Co-Operative Industries
Corbi Plastics
Elyria/Hodge Foundries Co.
Inteplast Group Ltd.
Willbanks Metals
Zotos International Inc.
Akron Foundry Co.
Alo North America
Bosal International
First American Plastic Molding Enterprise
MAC Equipment
Mayville Engineering Co. Inc.
Kurtz Bros. Inc.
Aesco Electronics
Code 3 Inc.
Columbia Marking Tools
Euro-Rite Cabinets
Fampec Technology LLC
Faubion Associates Inc.
Ginsey Industries Inc.
Imagineering Finishing Technologies
Imperial Woodworks Inc.
Innovative Lighting
Liburdi Dimetrics
MTC Transformers
Plastiques GPR
S.A. Robotics
Sunrise Windows
Positran Manufacturing Inc.
Manufacturing Tomorrow

Manufacturing Today - Spring 2010