Pricing is one of the most critical elements of any business strategy, it is the cornerstone of revenue generation, and getting it right can make all the difference in a company’s bottom line. However, pricing is not just about setting numbers – it involves cross-functional collaboration across different departments within the organization. And if you see yourself as a professional with strong analytical ability and a passion for numbers, this interaction may seem like a challenge.
Working together with Commercial, Finance, Trade Marketing, and Category departments will lead to better decision-making, more comprehensive analysis, and ultimately, more effective pricing governance. Here are some key reasons why cross-functional collaboration is necessary to execute improvements in pricing and pricing governance.
1. Commercial: understanding customer needs
Commercial close customer interaction provides valuable insights about price sensitivity, customer preference, and competitor offerings. Collaboration with commercial can help pricing managers understand market trends, customer demand, and the competitive landscape. By leveraging these insights, pricing managers can develop pricing strategies that reflect the needs of customers and the realities of the marketplace.
2. Finance: building a sustainable business model
The finance team has a unique perspective on pricing as they are responsible for analyzing profitability, cash flow, and return on investment. Collaborating with finance will enable pricing managers to understand the financial implications of pricing strategies, including price changes, promotions, and discounting. By working together, the pricing team and finance can develop a sustainable business model that balances revenue growth with profitability and cash flow.
3. Trade Marketing: aligning with business objectives
Trade Marketing plays a critical role in ensuring that pricing strategies are aligned with business objectives. Collaborating with trade marketing can help pricing managers understand the impact of pricing on promotions, merchandising, and distribution. Trade Marketing can provide valuable insights about the in-store environment, pricing strategies, and shopper behavior. By working together, the pricing team and Marketing can develop pricing strategies that support the company’s overall business objectives.
4. Category: optimizing product portfolio
Collaborating with category teams can help pricing managers optimize their product portfolio. Category teams have deep expertise in product development, product positioning, and product lifecycle management. They can provide valuable insights about product margins, product differentiation, and SKU rationalization. By working together, the pricing team and Category can develop pricing strategies that support the optimal product portfolio.
In conclusion, cross-functional collaboration is critical for pricing managers to execute improvements in pricing and pricing governance. By working with Commercial, Finance, Trade Marketing, and Category, pricing managers can develop pricing strategies that reflect customer needs, align with business objectives, optimize the product portfolio, and ensure a sustainable business model.
We understand how challenging it is to keep getting the price data results consistently and reliably. That is why Ficstar supports pricing managers by providing reliable and accurate competitor price data to adjust their own prices. Reach out at Ficstar.com if you are interested in a free trial.