Putting Structure to Pricing in an Acquisition

Our partners over at RevBeam wrote a great blog post today about how to make pricing the hero of an acquisition:

https://blog.revbeam.com/getting-pricing-right-in-mergers-acquisitions

In additon to what they mention, we often see two further dimensions that can help improve pricing post-acquisition:

1. Conduct market research pre-acquisition to understand the customers' current perception of brand value, as well as to determine the current positioning and brand health in the market place. Say you own Brand A and customers are willing to pay $10 for that brand. You are acquiring Brand B and while it has traditionally been sold at $10 as well, price research shows that they are willing to pay $15 for it. In a post-acquisition scenario this should certainly be used to a) differentiate the portfolio and b) reap additional profits when customers are actually willing to pay more for Brand B.
2. Use a revenue management system like Stratinis Pricing Suite in its cloud-based version to easily do scenario building of merged prices, discounts and rebates, before actually committing them to the market place. SPS Online can import existing prices, discounts, rebates, terms & conditions from ERP such as SAP, and then allow users to simulate different scenarios, analyze resulting profitability and adherence to corporate targets. Even if you need to import all existing data you can be up and running within a few weeks and will then have a powerful tool to simulate different strategies. Being cloud-based there is no need to invest in infrastructure or setup complex systems.

Contact us if you would like to discuss your specific needs and requirements.