Pricing is the fastest, single most effective way a company can impact its profitability. Implementing a major marketing and advertising campaign may increase revenue; downsizing may cut costs; reducing manufacturing costs may make you a little more profitable. But effectively managing the price of your products and services will have the fastest impact on your profitability!

Here's a fact: Raise your prices 1% and you will see a 12.3% increase in your product's profitability.*
*(Based on the Standard & Poors 1000 Index, average pricing structure, and cost data. Your pricing structure will differ.)

• A 1% increase won't be noticed by your customers, will it?
• Why not raise prices 10%?
• When will you get push-back from your customers?
• Your sales staff?

BioPlan Associates can determine your customers' price sensitivity by market segment.

Pricing strategy should be based on customer value, product mix, your branding strategy, and the quality message you deliver. Life sciences companies, in particular, should design flexibility into their pricing strategies and develop ways to handle the rapid changes and uncertainties in this business segment. Even for technical and novel products, pricing sensitivity analysis is a repeatable and methodical process. Our cost-effective, customer-based approach to pricing analysis gets you the market information you need to leverage this marketing tool and achieve the financial results you expect.

Pricing is an under-managed activity in many companies:

• Pricing is not seen as "manageable": It's often done reactively; when the competition raises prices, or when customers complain.

• Times have changed: Companies used to be able to generate acceptable returns without smart pricing—not any longer.

• Pricing is not approached methodically: Effective pricing requires clear knowledge of your market and customers.

• Poor pricing is difficult to detect: Determining that you are under-pricing is not an easy task to undertake.

• Front-line marketing staff often have no incentive to manage pricing: Increasing prices risks losing customers and will not make your sales force's job any easier. Further, if the marketer is wrong and the company loses too many customers, the marketer could be blamed.

Be sure that your pricing allows for profits. Where is your break even point?

Can you quantify how your product will impact the client's bottom line and return on investment?

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