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Mercedes-Benz revolutionizes the sales model! What does this mean for your pricing strategy?
Mercedes-Benz has recently changed its sales model and abolished the traditional price lists to offer more transparency and flexibility. This is reported by various media (including “Auto, Motor und Sport”, chip.de). But what does this mean for companies that also need to rethink their pricing strategies?
The abolition of fixed price lists at Mercedes-Benz could have a signaling effect: customers increasingly expect transparency and tailor-made offers. However, such a model requires an extremely agile and well-thought-out pricing strategy. Companies that rigidly adhere to traditional pricing models could quickly fall behind. Instead, a dynamic pricing model that adapts to market conditions and individual customer requirements could play a decisive role.
Instead of fixed price lists, more transparency and flexibility
But beware: With flexibility comes complexity. Pricing becomes more demanding and requires a precise market analysis and a deep understanding of customer needs. This is where the pricing strategy of UNICconsult comes into play. Our RSEC model (Research, Strategy, Execution, Controlling) ensures that your pricing strategy not only meets current requirements, but is also future-proof.
Mercedes-Benz’s decision regarding traditional price lists shows that the market is ready to take new paths. Companies that adapt their pricing strategies early can benefit from this change and secure competitive advantages.
Don’t miss this opportunity! Now is the perfect time to rethink your pricing strategy. Contact the experts at UNICconsult and get your company fit for the future!
Photo: pixabay.com
Wirtschaftswoche on Germany’s Price Favorites 2024: Pricing Expert Riekhof Recommends More Price Flexibility
Which service providers from various areas of life offer the cheapest prices? For the second time, people were asked this by the analysis and consulting company ServiceValue and WirtschaftsWoche, a total of 213,000 people. The leaders in a ranking of “Germany’s Price Favorites 2024” according to the evaluation are the drugstore chain dm, closely followed by the discount chain Lidl.
In their current article “Germany’s Price Favorites 2024 “Cheap can anyone”: What really makes traders customer favorites” (06.02.2024), Wirtschaftswoche asks what makes these companies so popular in terms of pricing and what other companies can learn from them in this regard.
Pricing specialist Hans-Christian Riekhof advises companies to have more price flexibility
Interviewed by Wirtschaftswoche, Professor Hans-Christian Riekhof, expert for strategic pricing, points to the factor of price flexibility. Companies should learn to act much less generally when adjusting prices. Top performer dm provides a good example of differentiated pricing, explains the pricing specialist, who has developed and conducted numerous pricing studies.
The drugstore chain dm announced in 2019 that it would control its own prices for each store individually from now on, depending on its location and the competition on site. This means that if there is competition nearby, dm has the cheapest prices – in regions with less direct competition, the prices are then also gladly higher. The drugstore chain, according to Riekhof, takes advantage of the fact that consumers’ objective knowledge of prices is much lower than is usually assumed.
Although such pricing practiced by dm requires expensive resources such as personnel and IT, which smaller companies do not necessarily have at their disposal, it is also worthwhile for these companies to pursue more intensive pricing policy within their means, according to the pricing strategist in Wirtschaftswoche.
Read the full article of Wirtschaftswoche, in which he provides further detailed recommendations, under the following link:
https://www.wiwo.de/unternehmen/handel/deutschlands-preisfavoriten-2024-billig-kann-jeder-was-haendler-wirklich-zu-kundenlieblingen-macht/29627844.html
Learn more about the pricing studies:
https://www.unicconsult.com/publikationen/forschungsberichte/
Dispute over Pricing: Edeka and the Delivery Boycott by Brand Manufacturers
Germany’s largest retailer Edeka wants to remain steadfast in the fight over the pricing of brand manufacturers. Currently, there are 17 corporations that do not supply Edeka, said CEO Markus Mosa. According to a current report by the news channel ntv from April 26, 2023, it is said that the “greed” of the international food corporations is not yet subsiding. Suppliers to the Edeka association, which consists of 11,000 stores, include corporations such as Procter & Gamble, Mars and Pepsi as well as parts of Henkel, Schwartau and Unilever.
The pricing of the brands is even less comprehensible than last year, as many raw materials for detergents, but also wheat, oils and fats have become cheaper again, says Mosa. The branded goods industry maximizes its results and prefers to forego delivery. The background is a dispute that has been smoldering for months between retailers and leading brand manufacturers over prices.
It’s about power issues: Who can assert themselves in the pricing strategy?
“Constructive cooperation between suppliers and trade looks different”, says pricing expert Prof. Dr. Hans-Christian Riekhof. “When a retail group reports that there is a delivery boycott by 17 well-known brand manufacturers, then this is a phenomenon that we do not encounter every day – and that consumers also register in view of the gaps on the shelf.”
Obviously, one of the parties feels disadvantaged and cannot agree with the prices or conditions offered – there is no negotiation result. Riekhof: “In negotiation management, this is called ‘BATNA’ (Best Alternative to No Agreement). It’s about power issues: who has the upper hand and can ultimately assert their ideas?”
What do the pricing strategies for own brands look like?
Retailers like Edeka have already started years ago to make themselves more independent of the brand manufacturers by building up their own brands. However, predominantly in the lower price ranges, Riekhof continues. He recommends that retailers urgently review the pricing strategy for their own brands.
“From our pricing projects for retail, we know that the price gap between the retail brand and the manufacturer brand can be significantly reduced from the customer’s perspective. Here are untapped profit potentials for retail. Good that the manufacturers force the trade to review their price architecture.”
(Read also Riekhof on Pricing on the subject of price architecture).
Links
Read full article:
https://amp.n-tv.de/wirtschaft/Edeka-meldet-Lieferboykott-von-17-Herstellern-article24079771.html
Photo:
Tara Clark/pexels.de
Connectivity services must be better integrated into the customer’s ecosystem
As part of the empirical study “Customer Insights: Connected Car Services in Germany”, which Prof. Dr. Hans Christian Riekhof and Marc Scholz conducted for the Private University of Göttingen, the following interview with Robert Stolt was created. Stolt has been a Senior Manager in the New Mobility division of Porsche Consulting for five years. Both privately and in his professional life, he deals with topics related to New Mobility (Mobility Services, Electromobility, Connected Car, Autonomous Driving). The answers and opinions expressed in this interview represent his own point of view and not that of Porsche AG or Porsche Consulting.
Professor Riekhof: What importance do you attach to connectivity services compared to other new topics in the automotive industry, such as electrification, mobility services, autonomous driving?
Robert Stolt: From my point of view, connectivity services are primarily assigned the importance of being an enabler for topics such as mobility services and autonomous driving. In this context, connectivity represents part of the components along the technological development.
Nevertheless, connectivity services can deliver added value for the customer through the possibility of individualization. Connectivity services can thus both drive new topic areas in the field of mobility and be an independent business area.
Professor Riekhof: What technological trends will further promote the topic of connectivity in the future?
Robert Stolt: I think that strong technological drivers in the connectivity environment will be services to extend vehicle functions via over-the-air updates on the one hand. And on the other hand, vehicle-to-everything (V2X) communication. In the future, communication with the charging station will also be important due to electrification.
Professor Riekhof: What measures do you think could be taken to further promote the spread of connectivity services?
Robert Stolt: To further promote the spread of connectivity services, it requires a simplification of the use of Connected Car Services and an accelerated integration of the services into the vehicle ecosystem. Likewise, the handling of Connected Car Services can be improved by voice control in the vehicle.
This function greatly simplifies the usability of the services. Likewise, connectivity services must be better integrated into the customer’s ecosystem. Ultimately, online training or “how-to-use” videos from the manufacturer or the sales consultant in the car dealership could also be a way to support customers in dealing with the services or in activation.
Professor Riekhof: How important do you think future collaborations with third-party providers, such as streaming providers or payment service providers, will be in the context of vehicle connectivity?
Robert Stolt: I think that collaborations with third-party providers can be helpful in order to keep the focus on one’s own core competencies in the sense of Connect Services. However, own services should also be offered that have added value for the customer in relation to the own brand. In this context, Porsche, for example, offers the Porsche Track Precision App to promote brand loyalty of customers through Connect Services.
Professor Riekhof: Our study shows that almost a third of respondents are not willing to pay for Connected Car Services. Are you considering models of flexible pricing or on-demand pricing to increase acceptance for Connected Car Services?
Robert Stolt: At Porsche, a free usage period for the Connect Services is included for the customer at the beginning. After this usage period has expired, the Connect Services are offered at fixed package prices.
Professor Riekhof: Do you see different needs regarding the Connectivity Services for fleet customers and private customers?
Robert Stolt: Yes. Fleet customers usually place greater value on connectivity services that can lead to more efficiency or transparency of the total cost of ownership, while private customers also request infotainment services in addition to safety features.
Professor Riekhof: According to our study, there is great trust in the premium manufacturers in the use of data from the Connectivity Services, Apple is in 4th place ahead of other European manufacturers. Facebook and Google are clearly lagging behind. How do you assess this result?
Robert Stolt: Apple differs from Facebook and Google in that they invest heavily in the perception as a data protection technically secure company. This image and the external impact of Apple is very positively perceived by customers, especially in Europe.
In the future, data protection features will be in even greater demand, which will make Apple’s lead over the other internet companies even more relevant. In general, Connectivity Services should primarily offer added value from the customer’s point of view – e.g. when using the vehicle, and no data should be sold to other companies.
Photos: Robert Stolt, UnicConsult
Further links:
More on the study “Customer Insights: Connected Car Services in Germany” (Riekhof/Scholz, published 2020)
AutoPress reports on Pricing Study for Auto Suppliers
The online industry magazine “AutoPresse” reports on the pricing study on auto suppliers by the PFH Private University of Göttingen. The medium picks up one of the results: Automotive suppliers could increase their profits by focusing more on their pricing.
In a survey of executives and experts from sales and marketing, Dr. Hans-Christian Riekhof, Professor of International Marketing at PFH, found that pricing does not have a consistently high internal value. Compared to the other profit drivers, such as variable and fixed costs and sales volume, price is given the least importance. Suppliers see cost reductions and volume increases as more important for improved profitability than improved price enforcement.
Read the detailed study at:
https://www.unicconsult.com/referenz/riekhof-mitschke-pricing-bei-automobil-zulieferern-2018/
AutoPresse online:
http://auto-presse.de/autonews.php?newsid=501300