The importance of pricing strategies for the corrugated board processing industry
- dstuehlinger
- vor 3 Tagen
- 3 Min. Lesezeit
For packaging manufacturers, pricing is no longer a purely operational side issue - it is increasingly becoming a strategic core competence.
Pricing is of increasing importance in business
In the past, pricing was seen by many companies - especially in the manufacturing industry - as a necessary sales task. However, this view is now outdated. Pricing has evolved from an operational lever to a strategic management discipline. [1]
Especially for companies in the corrugated board processing industry, which operate in a highly competitive commodity market, professional pricing is now essential for survival. Alongside the quantity sold, the product price is the central lever for your company's turnover. In contrast to the quantity, however, the price of your products has a major impact on the contribution margin and profitability of your products. The factors influencing your pricing have become more diverse and dynamic in recent years: Raw material prices, energy costs, freight costs, international market distortions, customer behavior and regulatory requirements must be constantly re-evaluated and taken into account. [2, 3]
The relevance of pricing is also reflected in the change in perception within companies: according to a study conducted by PFH Göttingen in 2023, the proportion of companies that attach high or very high strategic importance to pricing has increased dramatically within five years - from 45% (2018) to 66% (2023). Today, pricing decisions are a management task and increasingly become the subject of strategic planning. [1]
This is no longer just about reacting to cost increases on the purchasing side. Instead, it is about active pricing. Those who manage to implement pricing measures in a proactive and differentiated manner can secure margins significantly better. The Global Pricing Study 2024 by Simon-Kucher shows that 65% of the companies surveyed have “pricing power”, i.e. the ability to increase prices beyond their own cost increases without losing customers or significantly damaging demand. However, not all companies are equally capable of setting prices confidently and persistently. For companies without this ability, often in heavily price-driven industries such as packaging production, this means that margins come under pressure, especially when raw material prices rise or demand shifts. [2, 3]
How pricing power can be developed
However, pricing power is not a fixed characteristic, but an objective that can be actively developed. Even companies that are still less assertive today can improve their position through strategic action. It is crucial that pricing is no longer based on the logic of passing on costs, but that the company's own price level is legitimized by a recognizable added value for the customer. [3]
Specifically, companies with weak pricing power could use the following levers:
Clear and communicated added value for the customer: Even with commodity products such as corrugated packaging, a view of the entire supply chain can create real added value that enables pricing to be aligned with the advantage. This must be actively communicated and anchored. [3]
Segmented pricing: Not every customer needs the same solution. Those who differentiate target groups (e.g. by industry, order volume or process integration) and adjust prices accordingly can achieve better contribution margins without losing competitiveness. [1]
Professionalization of pricing processes: A structured, data-based pricing approach with clear responsibilities, lower price limits and regular post-calculation enables better control. Coordinated cooperation between controlling, sales and management is key here. [2]
Use of digital tools: With the help of AI-supported pricing systems, customer data, competitive comparisons and simulations can be analyzed efficiently. This enables a faster response to market changes and targeted management. [2]
Training and argumentation tools for sales: Enforcing prices requires not only figures, but also the power of persuasion. If the sales department understands and can communicate the added value of the product or service, the conversion rate increases significantly. [1]
Exclusive look inside our Business Intelligence Meeting “Pricing Excellence”
The Professionals Academy also addresses the topic of pricing. Find out from Gábor Honti, CEO of EHISZ, what he took away from our last Business Intelligence Meeting on Pricing Excellence in Budapest for his day-to-day business.
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The Business Intelligence Meetings of the Professionals Academy offer family entrepreneurs in the packaging industry the opportunity to network with each other and to discuss various topics with other family entrepreneurs and experts.
You can find detailed information on our website.