Case Study: Channel Profitability improvement

The opportunity:  A 30%+ exchange rate increase on a single-source product line created a significant profit challenge that competitors did not face.

The paths:

1. Discontinued price promotions for channels where wholesalers did not use them to incentivize end-user purchases.
2. In another channel where wholesalers made 2x typical wholesale margins, pricing structures and programs were changed to recapture value.
3. The entire product line was reviewed with slow-moving low-profit items discontinued, pack size price inconsistencies resolved, and strategic trade-out of products in key accounts made to boost profitability.
4. Account-specific price-segment categorization and discounts were reviewed and changed where appropriate.

The result: Instead of a price increase of near 20%, an increase of only about 5% helped the division achieve revenue and profit growth.  The resulting simplification also eliminated non-value-add activity, and made the pricing structure more defensible to customers. 

See the potential benefits WisePath Strategy can help you achieve improving channel performance.