- Long tail of medical technology products with cost plus mark up prices in the system
- Margin pressure from procurement,
- Competitors offering discounts in the MedSurg marketplace leading to unstructured sales discounting and margin erosion
- Reluctance from the sales force to implement prices rises due to perceived fear that sales volume would be lost.
- Issues with the pricing master data leading to incorrect invoicing and margin leakage
- Market acceptance of price rise leading to incremental EBIT gains.
- Strategy to combat procurement
- Pricing structure to support strategic discounting and margin expansion program
- Develop a pricing team to centrally manage pricing
- 675 basis points of margin improvement driven by the Project Blackbird SKU price optimisation project in the first 12 months. EBIT gains in year 1 were $2.7M on revenues of $40M and in year 2, gains of $3.5M were realised with a 2nd iteration of the Project Blackbird algorithmic pricing program.
- New approach to selling on value using Customer Value Discovery program rolled out.
- More detailed competitor pricing intelligence database developed
- Development of new pricing strategy + structures.
- Implementation of pricing management function to manage pricing structure, discount programs and reimbursement economics.