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    Positioning and Pricing a New Technology

    The Challenge

    A global leader in polymer chemistry developed and patented a novel technology that delivers a number of benefits to paper manufacturers: improved yield, reduced effluent, fiber savings and reduced downtime. The new technology was capacity constrained and would cannibalize existing product and service sales. Consequently, targeting, positioning and pricing were critical to optimizing profitability.

    The Approach

    Market Edge designed and led a strategic marketing project to

    1. Understand the competitive landscape – detailed analysis of the applications, competitive forces, opportunities and threats in the target market
    2. Create actionable customer segmentation – development of behavior based segmentation and targeting to prioritize customer segments that  were both attractive and create an opportunity for competitive strength
    3. Position the new technology – development of segment specific value propositions by differentiating and quantifying the value of technology benefits for each target segment
    4. Optimize pricing – analysis of value creation and competitive pricing to set commercial policy, such as price targets, discount policy and terms, to capture the value created

    The Outcome

    A project team of client and Market Edge resources applied the strategic marketing process to the target market over a four month period. Through a series of customer visits and team workshops, the positioning and pricing strategy were developed and implemented as part of an overall technology launch. While capacity constrained, sales during the first 18 months were limited to agreed targets where premium margins delivered an initial return on investment and funded capacity expansion.

    Uncertainty Assessment

    Critical Purchase Criteria