Raw material prices, energy and other costs had escalated rapidly over a two year period. With paper representing often in excess of 50% of the finished cost of goods, corrugated manufacturers were left with little option but to increase prices. With over two thirds of UK corrugated packaging being supplied to food and beverage manufacturers, this was a significant challenge. Brand owners face stiff resistance when attempting to pass through increased costs to their retail customers and with professional buyers and a fiercely competitive market environment to contend with, a systematic and robust programme of preparation and training was required.
The Programme
Over a six year period, PiP Associates have worked tirelessly with DS Smith, on every aspect of price increase methodology and training by carefully analysing current levels of performance and then coaching management and sales teams in the tactics of value recovery and price and margin management. We have seen some fantastic results through broad scale price increases and individual account margin management programmes. We have tailored this support to every aspect of price increases from having a clear rationale through to negotiating deals and monitoring performance. This has transformed the commercial team’s ability to consistently deliver price and margin improvement.
Results
The UK sales and management teams are now “black-belts” in price and margin management. With the ongoing scarcity of the basic raw material – waste paper, prices are likely to continue to rise and the skills and plans that have been developed will be a valuable part of the sales, national account and management teams’ armoury.
“PiP Associates have helped us considerably in the ongoing challenge of improving profitability within our highly competitive industry. From a cost/benefit point of view, the results have far outweighed the costs. PiP Associates have also invested heavily in keeping themselves abreast of developments within our industry, this ensures that training modules do not become static but highly relevant and in tune with prevailing business challenges”
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