The years-long recovery of building construction in Europe and the building boom in the United States should be a rising tide that lifts all boats along the value chain. Yet many building materials producers remain moored to the docks, taking on water as their input costs rise.
The question that producers face is clear: Will they continue to rely on conventional marketing approaches that are liable to constrain their growth and endanger their margins? Or will they seize the opportunity afforded by favorable market conditions and do the hard work required to protect and improve their profitability?
Building materials producers that choose the latter option will not need to make any revolutionary, groundbreaking changes. What they will need is a cleaner, more structured approach to pricing, one that is data-driven, pragmatic, and repeatable. If they put such a process in place now—at a time when they can act from a position of relative strength in growing markets—it could make a significant difference in their profitability. These producers will not only be set up to raise prices when conditions warrant it. They will also be less vulnerable to the risk of price wars and volume-based competition when growth inevitably slows.
Why Building Materials Producers Need a Fresh Take on Pricing