BrazilLely enlists Hammer for international pricing study
Facing the need to understand the pricing power of one of its products in numerous international markets, machine and robots manufacturer Lely enlisted Hammer to conduct a pricing benchmark. That analysis provided the groundwork for the product’s global pricing strategy.
Founded in 1948 in the Netherlands, Lely develops premium robotics and data systems for the dairy sector. The company’s milking systems are used by farmer worldwide, not only boosting productivity but also enhancing animal welfare.
For one of its products, which is sold in 50+ countries across all corners of the globe, Lely desired deep insights into its key pricing characteristics. Karin Ludikhuize Charbo, Senior Project Lead Market Intelligence at Lely, explained: “We wanted to gain insight into the optimal price and service composition of the product. Since we offer this product worldwide, we also wanted to know to what extent there are regional differences.”
Hammer, a Dutch strategy consultancy and market intelligence firm, was brought on board to oversee the pricing analysis. Hammer’s team conducted a thorough research process, which included customized surveys per country were Lely had significant business.
Hypothesis-driven
A key step in the design phase was testing Lely’s internal hypotheses on the optimal pricing and service attributes and assessing the degree to which there are regional differences. This saw Hammer perform several hypothesis testing sessions with internal Lely teams, before the data collection process with customers kicked off.
With all the data collected, Hammer’s team then tested the different pricing hypotheses used by Lely (applying a conjoint analysis) and assessed those against the findings from customers. The results were presented in a global report, and country specific reports which outlined local insights and recommendations.
“It was a complicated project: the subject matter to be researched was highly specialized, but this did not prevent Hammer from setting up a solid design. And the analyses were very extensive and good, including a clear recommendation,” said Ludikhuize Charbo.
The engagement provided Lely with valuable information about customer valuation of service attributes and pricing performance and options. The input also enabled the dairy machine manufacturer to gain a better understanding of the price elasticity of its product and offering.
