Industrial Chemicals Supplier
Leveraged Market Insights to Understand Price Positioning in the Market
Market research revealed customer price perceptions and competitive positioning in the market
Leveraging Market Insights to Optimize Pricing Strategy
An industrial chemicals supplier utilized customer surveys and competitive analysis to refine pricing strategy and identify additional pricing opportunities.
Understanding market positioning is critical for maintaining competitiveness in the industrial chemicals sector. This supplier lacked clear insights into how its pricing compared to competitors, leading to concerns about being overpriced and missing opportunities for price optimization. By conducting customer surveys, in-depth interviews, and competitive web scraping, the company gained valuable data on price perceptions. The research revealed that client pricing was moderately positioned and competitors had already implemented 10% price increases. These insights enabled the client to explore further price adjustments without triggering high customer churn.
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Situation
Unclear Market Positioning Created Pricing Uncertainty
Limited insights into competitive pricing led to concerns about being too expensive and missing strategic pricing opportunities.
- Client lacked insights on its price positioning within the Industrial market compared to key competitors
- Believed they were priced too high relative to competition and had been more aggressive
Approach
Data-Driven Pricing: Understanding Market Perceptions and Competitive Positioning
Customer surveys, web scraping, and in-depth interviews provided actionable insights to refine pricing strategies and maintain competitiveness.
- Collect distributor and end user perceptions via
- 20 IDIs with large distributors & end-users
- Online survey of 200 end-users
- Competitive web-scrape across 6 distributors
Survey Insights
Web Scrape Results
Respondents expect slower 5% increases over the next 6–12 months:
The industry has seen price increases of close to 10% in the last six months, The reason for the increase is the inflation pressures that have been experienced across the economy.
Distributor
Over the last six months, pricing has risen 10-15%.
Over the last 2-3 years pricing has risen 5-10%. The driver behind the changes has been COVID related, supply shortages, and demand increases.
Distributor
Manufacturers pricing has Increased by 9% over the last six months. The total price increase in the last three years has been 11%.
Distributor
Pricing increases from suppliers have been in the 5-10% range over the last 6 months or so.
Distributor
Price has gone up by 5-7% over the past two years, according to this source.
TTI Ryobi
Respondents believe prices will stabilize as supply chain issues abate and demand returns to normal:
In the next 6 months prices will increase an additional 10%, while in the following 2-3 years the price increase will be
8%.
Distributor
The expectation will be that prices will increase 5% in the next six months. Two years from now pricing increases should be 2% per year in that time frame.
Distributor
The expectation in pricing will be an additional 10% increase in the next six months dropping to a 5% increase in the next two to three years.
Distributor
I'm not expecting to see a lot of price decreases. More of a maintaining of pricing.
End User
I would expect prices to go up some. Maybe a few percent a year.
End User
Because of the continued increased cost for raw materials prices are expected to go up 8-10% in the next 6 months. By late 2023 the price increase will drop to 5%.
Distributor
Impact
Identifying Pricing Headroom
Market analysis showed opportunity for increases without risking share
- Client offerings were perceived as moderately priced vis-à-vis competitors
- Most competitors had increased price 10% in the past 6 months
- Client prices were not consistently above competitors at key distributors
- Client had room to institute additional price increases without driving high switching behavior
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