Martin Scott summarises the key messages from our report, Paying the Price for Recession. This research looked at pricing trends during recession and the implications for future strategy. The results have significant implications not only for pricing strategies but for the entire business model.
|Many UK firms recognise that pricing is a different ball game now - following a sustained period of recessionary discounting, customers see lower prices as the norm, and are unwilling to pay more. Discounted prices are out of kilter with the fixed cost base, and coupled with rising cost inflation, margins are being squeezed from both sides.
The consequences of lower price baselines, changed consumer buying habits and an altered competitive landscape mean that businesses now need to re-evaluate their pricing strategy as part of an overall strategic review. Setting and executing pricing policy to drive incremental profit from each unit sold will be critical as businesses seek to compete and to grow profitably in their chosen markets.