Best practice: How a discount system improved the pricing strategy in Japan
Today's markets demand flexibility and adaptability - in #Japan, redesigning a company's #pricing strategy is a real challenge.
Our AAA Advisor Mario Spitzer in Tokyo played a key role in this transformation for more #competitiveness and #customerTrust.
Unlike in Western countries, where list prices provide orientation, ‘moon prices’ are often common in Japan - prices that are far higher than the real sales prices and serve as a basis for negotiation. This practice leads to a non-transparent price structure that unsettles retailers and customers.
Before the restructuring, there were no clear criteria for granting discounts. Discounts were granted subjectively in order to meet the perceived competitive conditions. Clear guidelines for retailers could not be enforced.
To change this, a new pricing strategy was developed together with the sales team and the head office, based on a #discount system that takes qualitative and quantitative factors into account. The new system ensures regulated and transparent discounts by combining order quantities, sales space design, technical service and training as well as the application of the CI by the sales partner. This structure ensures that discounts are not only granted according to volume, but also according to the long-term importance of the customer relationship. At the same time, the new discount system offers retailers the opportunity to improve their purchasing conditions and discounts by fulfilling the required qualitative factors.
Resistance to the implementation came mainly from the sales department, where many feared that the stricter discount system would lead to a loss of sales. However, clear communication convinced the team that transparency and consistent pricing strengthen customer trust in the long term and promote clear business relationships. The #transparency provided by the structured discount system resulted in a significant increase in sales and significantly improved the competitive position in Japan. The result was overwhelming: customers felt better informed and were more willing to make purchasing decisions. Price transparency strengthened customer confidence in the long term. The market share was massively increased.
This example shows how important it is to scrutinise structures and develop innovative approaches that do justice to market conditions. In a world characterised by constant change, flexibility remains the key to success. Adapting the #pricing strategy is a prime example of how change can lead to a competitive advantage and strengthen the foundation for long-term customer relationships.
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Pricing Manager at Bosch
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