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Industrial Products

Manufacturers of industrial products must carefully select their pricing game, because it will determine how well they can manage product differentiation, maintain discipline in their negotiations, and use market characteristics to their advantage.

  • Custom Game: This fits to most industrial markets, where customer and product fragmentation make bundling, segmentation, and other approaches impractical or even misleading. Competitive price positions play a key role.
  • Choice Game: Behavioral economics come into play in situations where companies can target specific segments with a differentiated portfolio and have less need for sophisticated discounting. 
  • Power Game: In highly concentrated markets, every deal matters because it affects every other deal. Negotiating skills and discount discipline are paramount. Game theory is the framework for pricing in these markets. 

To bring innovations to market, some companies have made a switch to the Value Game, where alternative pricing models unlock potential that traditional models can’t.

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