Case Study: Executing Negotiations
Can You Confidently Negotiate Price Changes For Successful Price Realization?
Leveraged market study results to develop a strong negotiation strategy, enabling the client to enter negotiations with confidence and data driven validation.
The Challenge
An industrial products manufacturer serving multiple end markets faced a significant pricing challenge with a major customer, accounting for a large portion of their revenue. Over a 4-year contract, the manufacturer had implemented minimal price increases (<4%) despite a 23% rise in costs. As they prepared to negotiate a necessary price increase, the customer unexpectedly requested a significant price decrease just one week before negotiations.
The Solution
INSIGHT began by undergoing in-depth interviews with the customer’s distribution network and one of their main competitors to uncover critical information: the customer had raised prices on the component sold to end-users by 15-25%, despite only a minimal increase from the manufacturer. Additionally, it was discovered that finding a replacement would take 12-18 months, with only one alternative supplier available. Armed with these insights, INSIGHT developed a robust negotiation strategy, conducted on-site training, and helped the business enter the negotiations with confidence and a clean path to success.
