CASE STUDY

Improving Mix Management for a consumer goods manufacturer to drive strategic growth & increase profitability

Our client, a global B2B producer of frozen food products, offers a broad product portfolio that must continuously adapt to ever-evolving consumer tastes within an increasingly globalized market. As they navigate challenges with operational efficiency, rising production costs and increasing customer expectations, margin pressure has intensified, while supply chain complexities have led to inconsistent service levels.

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Strategic Context

Competitive industry facing stagnating demand after a period of strong growth & increased price competition in key markets and regional customer differences

Operating at full supply capacity in recent years, with similar outlook for upcoming year

New factory opening enables volume increase, while competitors simultaneously ramp up supply 

Challenges
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Challenges
  • Sales processes not aligned to increasing complexity in product & customer portfolio, leading to large spread in margins between products, regions and customers
  • Sales steering largely operational, lacking strategic approach to pricing & margin optimization, especially in a sold-out situation
  • Minimal forward-looking capabilities to inform budgeted vs actual sales, limiting the ability to pro-actively steer pricing to support future growth
  • Low data visibility & low digital maturity within sales organization, leading to lack of data-driven insights to purposefully manage customer & product portfolio
Objectives
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Objectives

Short-term: Set up mix management to optimize product allocation, sell smarter & maximize margins.

Mid-term: Enhance forward-looking visibility on volumes & margins to proactively monitor & steer pricing decisions based on market dynamics.

Long-term: Enable future growth through targeted, strategic pricing with improved margin control;

  • supported by a structured, data-driven framework ensuring consistency and transparency across regions, products & customers;
  • fostering a fact-based decision-making culture.
Our approach
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Our approach
  • Using our Pricing Analyser tool, we quickly created transparency in pricing & margins and showed the potential of cost- & customer value-based pricing rules
  • Based on the outcomes we defined clear pricing strategies in line with the company’s strategic objectives
        • Incl. floor pricing rules, co-developed with the commercial & pricing teams,
        • Differentiated across regions, products & customers to enable active mix management and shift volumes to be more profitable.

 

  • We monitored adherence to the determined pricing strategies:
        • Tracking registered sales volumes & negotiated prices for existing & new business, relative to the budget to evaluate & actively steer on pricing strategy during the contract renewal season
        • Installing a feedback loop & actively steer on current and projected performance vs targets, backed by commercial directors, pricing director & country manager
        • Linking floor pricing targets to incentive plans to mobilise sales organization and unlock active portfolio management (vs execution of catalogue pricing)
Results
N
Results
  • Improved margin by 1% through active mix management while maintaining budgeted volumes
  • Monetized plan and a scalable forward-looking business intelligence tool & dashboard, enabling advanced insights for data-driven pricing & mix decisions
  • Enabled strategic pricing for coming years supported by set up commercial processes, data-driven pricing framework & fact-based decision-making culture
  • Embedded & linked with other business processes, e.g. budgeting & IBP, cycles to ensure continuation