Issue link: https://read.dmtmag.com/i/1531611
Covid levels that impact project budgets, pressure to contain costs and show profitable growth, supply chain challenges due to continued global instabil- ity, higher input costs of select raw materials and labor, fluctuating com- modity prices, and cus- tomer demands for lower prices. e aermath of Covid-19 continues to impact the construction and heavy equipment industries, with consum- ers being cautious about potential overpricing and turning to online platforms for competitive alternatives. is dynamic of being "caught in the middle" is not unique to the construction and heavy equipment industry. Manufacturers in the au- tomotive and commercial truck industry, as well as motorcycle and recre- ational vehicle industry, are being pressured on one side by customers who want price reduc- tions or stabilization, and on the other by high costs due to labor and commodity prices and high-interest rates. Performance Analysis: Impact of Market- and Value-Based Pricing rough the application of more advanced price strategy, many OEMs have observed typical benefits of increased incremental revenue of 5% to 10%, varying by in- dustry and organizational maturity in implementing market- and value-based pricing strategies. In ad- dition, other key benefits of the pricing strategy, are no negative impact on customer pay quantities, and addressing over- priced product / SKUs that negatively impact brand perception. For example, a compact construction equipment OEM with a large aer- market parts business sought to upgrade their pricing to market- and value-based strategy. By injecting competitive data, and knowledge of its product attributes https://www.forcon- structionpros.com IDA Universal January - February 2025 29 and value drivers such as weights, capacity, mate- rial types, dimensions, and branding into pricing strategies a 9% improve- ment in incremental rev- enue was captured. e OEM's dealers shared in the upside as well. Nav- igating the complexities of getting better pricing including understanding product value-drivers, as well as competitive and market insights can be time-consuming and daunting, potentially leading OEMs to retain the status quo. However, there is an alternative approach. Collaborating with an expert partner experienced in market- and value-based pricing strategies can facilitate the acceleration of addi- tional revenue.