Corporate profits fall as prices struggle with market volatility: study
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Corporate profits fall as prices struggle with market volatility: study

Global Research among pricing professionals reveals that 80% of corporate profits have suffered because prices have failed to keep up with rising costs and changing market conditions. A study by FlintFox found that, on average, companies estimated they lost $478,000 in potential profits due to their inability to change prices quickly enough, and 87% of pricing professionals are concerned about their ability to respond to future volatility.

John Moss, CEO of Flintfox, says: “In the face of ongoing volatility caused by fluctuating demand and cost volatility due to supply chain disruptions, businesses have learned to adapt their pricing strategies. However, the ability to make rapid, responsive price changes still eludes too many organisations.

Key conclusions:

  • As market conditions continue to be challenging, companies are trying to adopt more sophisticated pricing strategies with varying degrees of success. Most companies currently use tailored pricing across regions and sales channels to maximize revenue and margin opportunities, but according to the study, 64% find it difficult to implement complex channel pricing, and 62% struggle with regional pricing strategies.
  • In addition to the lag between market and price changes, respondents also believe that pricing errors have negatively impacted margins. Despite widespread digital transformation, 40% of companies still rely on spreadsheets for pricing management to complement their ERP systems, leading to inaccuracies.
  • Nearly two-thirds of businesses say they are unable to model price changes in advance, so key pricing decisions are made without understanding their likely impact.