Specialty Chemicals Provider

Enabling Smarter Pricing Decisions Across the Business

Equipping the business with the insights, technology, and processes needed to make better pricing decisions and protect margin.

This specialty chemicals distributor, serving retailers and trade customers, relied on a decentralized, largely cost-plus pricing approach that constrained pricing discipline and margin performance. By introducing segmentation, margin analytics, sales enablement, and new pricing tools, the organization established a more structured pricing model and a stronger foundation for sustained margin improvement.

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Situation

Decentralized Pricing Limited Margin Performance

Inconsistent pricing practices, outdated cost-plus methods, and volatile costs made it difficult to protect margins and maintain price discipline.

Client provides distribution and logistics services to retailers and customers
The sales team operated with decentralized pricing and did not consistently maintain price lists

Margin rates stagnated, and prior year net price attainment was negative
Pricing was largely based on a historical cost-plus approach despite frequent, unpredictable cost changes

Approach

Strengthening Pricing Discipline and Execution

A combination of segmentation, analytics, sales enablement, pricing tools, and governance improvements strengthened pricing decisions and supported margin growth.

Built customer and product segmentation and a refreshable model to set margin targets by peer group
Loaded margin targets into INSIGHT’s Tempo app with cost and price trend analytics
Delivered value proposition workshops and negotiation training to support price increase discussions

Developed a new List Price Book with data-driven quantity breaks and margin targets
Built a pricing management tool for ERP integration, compliance tracking, and leakage identification
Assessed pricing maturity and recommended improvements

Segmentation & Price Modeling

Developed deeper segmentation for robust price modeling

Establish Peer Groups & Address Outliers

Assessed value drivers to determine how to set peer groups, including product breadth, procurement, product exclusivity, food- and pharma-grade, customer relationships, customer industry, payment terms, lead time, and minimum order quantity.
Established peer groups based on key customer and product attributes where margins are expected to be comparable, such as business segment, customer type, and contract type.
Set relevant margin targets within a peer group and raised below target customer-products toward identified margin thresholds, differentiated by product type and customer tier.

Establish Floors, Caps, and Value Adders

Set minimum targets based on business segment and type, applying price increase percentage caps to mitigate risk.
Implemented price adders for value-add services, such as repack or payment terms.
Ensure at least maintaining prior year margins.

List Price Book

Applied pricing model recommended margins using margin percentile targets
Utilized a machine learning model to define quantity breaks using historic transaction data and industry knowledge
Determined the upper and lower bound margin targets at the customer and product level