Local subsidiary of major global fertilizer company
Price differentiation based on Customer/product segmentation
Project Scope & Objective
- Loss of ~10 points of market share to a disruptor with low margin expectations
- Lack of discount methodology results in large price / profitability dispersion
Project Summary
- Refining customer segmentation; Selectively prune “tail” customers (serve through distributors)
- Introduce discount corridors based on market segments to guide sales teams new sales incentive program based on margin
- Replacement of revenue-only sales incentive scheme to one including price and product mix drivers
Achievement
- Profit improvement based on price and mix variances.
- Simplified the discounting process with providing clear guidelines and price target
- Focus price effort on key account and reduce “tail” customers pricing disruption
- Reduce the number of internal price exceptions request