In a LeveragePoint webinar, Improving the Value Proposition for New Products, Dick Braun described Parker Hannifin’s WinStrategy, which transformed the company into a top-tier financial performer in the manufacturing industry. Key to its success was elevating strategic pricing as a corporate initiative taken seriously from the CEO on down. This case study recaps some of the key points from Dick’s presentation; to view On-Demand check out our Resource Center.
Based in Cleveland, Parker Hannifin is a $12B+ manufacturer of motion and control technologies and systems. Across 132 divisions and 46 companies, Parker sells a large mix of products (over 800,000) to almost a half-million customers.
Strategic Pricing at Parker
Along with other corporate initiatives, such as customer service, strategic procurement and product development, pricing is an important component of the WinStrategy. The pricing function itself is organized along the lines of lean six-sigma concepts used on the factory floor. For example, pricing cells (which are not jail for pricing people,” Dick jokes) are where prices are designed and assembled for each of the three main value streams (or factories): list pricing, new quotations and contract renewals. Quotation is particularly important given that half of their products are custom-built.
Value Pricing for New Products
Key to the success of Parker’s WinStrategy is the implementation of the Winovation process during product development. With Winovation in place, Parker is able to embed best practices for value-based pricing at every stage of the process to ensure a successful product launch. Click the link below to read on, and gather practical tips to apply to your organization’s product development and pricing strategy.