- Movens Advisory, the advisory arm of the Movens Capital fund, has just exceeded the amount of PLN 1 billion in total additional profit for companies generated through changes in pricing strategies. Movens advises brands such as Nestle, Wedel, 4F, iTaxi and the Pracuj.pl group.
- According to the latest research, as many as 85% of CEOs of companies expecting rising input costs and operating expenses plan to pass most of them onto consumers in the form of higher product and service prices.
- The popularity of price comparators, visible cooling in many industries, high inflation and economic slowdown – these are the key factors influencing the reorganization of business models and the development of new pricing strategies in Polish enterprises.
In 2023, the advisory team of Movens Advisory – the advisory arm of the VC fund Movens Capital, focused on effective pricing and revenue management solutions – achieved almost double the revenue growth. At the same time, the Movens pricing team exceeded the barrier of PLN 1 billion in total additional profit for companies. Over the years, companies cooperating with Movens achieved a 1-3 pp improvement in margin thanks to changes in pricing strategy. Those with revenues of around PLN 100 million per year achieved higher percentage effects of pricing activities (on average 2-5 pp additional margin), compared to larger enterprises with annual revenues exceeding PLN 1 billion. Companies that used Movens Advisory’s advice to change pricing strategies include Nestle, Wedel, 4F, and the Pracuj.pl group.
Pricing at a Price
According to McKinsey experts, 2023 turned out to be crucial for company pricing strategies[1]. Many manufacturers were forced to modify their pricing policy due to significant increases in the prices of basic and semi-finished products. According to the latest research this year, 85% of CEOs of companies expecting an increase in input costs and business operations predict that most of them will be able to pass on to end customers in the form of higher product and service prices – even with falling inflation[2]. The pricing strategy of companies is influenced not only by the cost of production of a product or service, but also by macroeconomic factors, trends, market realities, competition policies and customer behaviour. In Poland, the use of price comparators has become an important part of everyday consumer life, as a result of which many companies have been forced to reorganize their business models. According to the SW Research report for Allegro, in 2023, comparing prices and choosing the cheapest offer turned out to be the most common way of saving for 65% of Poles, and for 82% the key factor in choosing an online product was just the price[3].
– In recent times, we have noticed significant changes in the approach of companies to pricing – for many of them, the development of an effective pricing policy has become a necessity. This is due, among other things, to the noticeable cooling in many industries such as construction, furniture, transport or IT. Many companies then consider lowering prices, hoping to maintain a high level of sales. Some try to maintain existing prices, knowing that consumers are refraining from purchases for reasons other than prices – such as an economic slowdown, high inflation or lack of demand in the market. However, what should a company do if, in the wake of recent years and increased demand, it has invested in new production capacities and today its offer “stops selling”? The role of Movens Advisory then is to eliminate so-called profit leakage and help companies understand how different pricing decisions can affect their revenue, profitability, sales volume, and market share – says Dr. Maciej Kraus, a partner at Movens Capital, who has specialized in pricing for 20 years.
Optimization of pricing strategies as key to success
Movens Advisory supports companies in developing comprehensive pricing and revenue management strategies, allowing companies to generate higher profits in a changing economic and consumer environment. It also offers its own technological solutions, including a platform for pricing management in trade, a tool for pricing management in subscription businesses, allowing for ongoing business analysis and flexibility in adapting pricing models, and a platform based on war gaming, or simulations of different market reaction scenarios and competition for price optimization.
– Our tools are used by B2B companies, FMCG manufacturers and traders (food industry, chemicals, supermarket and hypermarket chains, discount stores, wholesale networks), or SaaS model businesses. So far, we have served companies from over 80 countries on all continents. In 2023, our team grew by almost 100% and we expect a similar growth this year – we are expanding our analytics and software teams and also emphasize consulting in the RevOps area. This segment in Poland is still growing, but in the USA it is already standard among technological companies seriously thinking about becoming “unicorns” – emphasizes Wojciech Gorzeń, Head of Pricing at Movens Capital and former longtime global head of pricing at Swiss Syngenta AG.
[1]https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/bucking-the-odds-an-investor-approach-to-portfolio-pricing
[2] https://www.ey.com/en_pl/ceo/ceo-outlook-global-report
[3]https://swresearch.pl/news/jak-zmieniaja-sie-trendy-i-preferencje-wsrod-konsumentow-robiacych-zakupy-online-wyniki-badania
