Project example: From Cost Plus Pricing to Value Pricing

Using a project example, we will show you how ship chandler TTS Marine was able to improve its position through optimized price management from cost plus pricing to value pricing.

Initial situation:

R&P carried out a pricing audit for the service department of the ship chandler TTS Marine in Bremen (MacGregor). TTS Marine had already earned a bad reputation in the market for spare parts: prices were too low for monopoly parts and too high for commercial goods. The result: a continuous decline in sales and earnings over a period of years.

Measures:

In addition to a technical and benefit-based segmentation of the more than 50,000 parts, we defined a new pricing process with our customer. Closely linked to this was the definition of different value-based pricing logics. With such a large number of items, it was important to price large parts of the portfolio consistently through differentiated markup and value pricing.

Result:

Spare parts sales increased by over 15 percent thanks to the new differentiation. The consulting fee already paid for itself after the first four months of implementation.

Today, the new structure, process and methodology are in place, allowing TTS Marine employees to independently develop a market-based price for all items that matches customers’ willingness to pay.