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How to use pricing as a competitive advantage

Jul 31, 2019

In times of shifting raw material costs, chemical companies need to better understand their customers’ buying behavior and how their business units price products to hold onto margins and market share. With costs of materials and freight rates rising, plus the ongoing tariff increases on specialty chemicals, companies must find a way to use pricing as a competitive advantage to ensure continued success.

Although properly pricing products can be challenging, a strategy must be developed to maximize revenue vs. cost. Understanding that pricing is highly subjective, buyers don’t care about the company’s costs and emotion usually trumps logic is the first step to success. Also, escaping the commodity trap by providing value-added services can allow companies to capture the maximum value through price setting and execution.

A recent Customer Think article summed up five strategies to structure your pricing for maximized revenue and profitability:

  • Raise prices to increase revenue
  • Limit the number of options
  • Offer tiered pricing
  • Consider unlimited pricing over a certain time
  • Set the price as “free”

To learn more about how to ensure customers perceive that doing business with you is worth the risk, read the article here.

Why should you care?

Introducing smart ways of pricing is indispensable to successfully bring innovative solutions to the market.


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