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hitachi construction machinery (hcm) needed to improve its pricing analysis and data visibility in order to become more competitive in a changing market. this need was important as hcm was experiencing eroding margins from low-cost country competition and increased grey market challenges. to better compete, hcm needed to improve their competitive pricing capabilities and streamline its pricing processes, which relied on several different tools and data sources. additionally, too often the pricing calculations were based on a cost-plus model, which completely disregards the customer’s willingness to pay and the market situation. the annual price revision took 5 month to complete due to the manual pricing process managed in spreadsheets and home-grown databases lacking data-driven segmentation and pricing logic. the company suffered from delayed pricing updates a result of the long lead times, collecting the relevant data, running the simulations and doing the pricing. long lead times applied both to the annual price revision and to all the newly introduced parts. with an inconsistent pricing system and without a powerful analytic process, hcm struggled with pricing optimization, pricing parts in a timely manner and ultimately increasing sales.
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