At Thomas Kellie & Co. we focus on “People Driven” strategies that allow an organization to maximize their efficiencies and drive growth.
At Thomas Kellie & Co. we don’t just focus on price ….we understand price. Pricing is an integral part of any organization and how it relates to their bottom-line.
At Thomas Kellie & Co. we focus on learning our client’s business, teaming with them to understand their processes. We use an analytical approach to identify areas of improvement and how we can document the processes.
At Thomas Kellie & Co. we focus on the Product Life Cycle. We team with our clients to understand where they are in relation to the PLC and use that to identify key areas of improvement opportunity to drive growth while identifying ways to reduce cost and deliver value to our client’s end user.
We team with our clients to identify areas that will allow them to maximize their strengths and talents in order to efficiently drive overall growth.
Picture an organization of any kind, be it a small non-profit organization run by five team members or a large multinational corporation with thousands of employees; now take away the people. What do you have left? Not a whole lot.
You may have envisioned the organization’s physical resources as what was left behind such as empty buildings and quiet offices, or its financial resources like the money behind the business, but no matter how great an organization’s physical or financial resources, or how successful its product or service, it is clear that no organization can thrive without its foundation and its blood – its people. People are an organization’s strongest resource. They are the intelligence, the skill, the decision makers and the energy behind the success (or even failure) of any organization.
People are an invaluable resource to organizations, and so businesses of all kinds are becoming increasingly selective with the talent they bring into their teams. Recruiters and Human Resources professionals’ major job is to ensure that interested job applicants have the right experience, attitudes, ability and decision-making skills that fit an organization’s culture and in turn, help drive it to success. Employers cannot afford to simply fill positions; they must ensure that positions are filled with the right people and that these right people are there to stay. This means employers are responsible for taking special care to ensure that their employees are satisfied and happy with their positions and work culture, no matter how major or minor their role.
With people being such an invaluable resource to organizations, many businesses are moving towards “people-driven’ strategies that focus on the long-term satisfaction of their people as a stepping stone to the organization’s achievement. This requires developing a compelling vision, a strategy for achieving it, as well as incentives that ensure that people work toward that vision as a team.
Our process is to team with our clients to understand how price is affecting your business and how pricing can be set to maximize growth and profitability. How you set your prices can have a host of implications for your business. Not every price you set needs to maximize your margins. Many small businesses use price to compete, change market share or create different revenue scenarios. Understanding how pricing affects your business model, not just your bottom line, will help you better choose price levels.
The price you set affects your profit margin per unit sold, with higher prices giving you a higher profit per item if you don’t lose sales. However, higher prices that lead to lower sales volumes can decrease, or wipe out, your profits, because your overhead costs per unit increase as you sell fewer units.
One of the most obvious affects pricing will have on your business is an increase or decrease in sales volume. Economists study price elasticity, or the response of consumer purchasing to a price change. Increasing your prices might lower your sales volume only slightly, helping you make up for decreased volume with higher total profits generated by higher margins. Lowering your prices can increase your profits if your sales jump significantly, decreasing your overhead expense per unit. Test the market’s response to price increases by changing prices in targeted areas before instituting an across-the-board price increase.
The price you set sends a message to some consumers about your business, product or service, creating a perceived value. This affects your brand, image or position in the marketplace. For example, higher prices tell some consumers that you have higher quality, or you wouldn’t be able to charge those prices. Other consumers look for low-priced products and services, believing they’ll get the quality they need at a low price. Offering sales, discounts, rebates and closeouts can send the message you can’t sell your products or services at your regular price, or tell buyers they have a short-term opportunity to get a bargain.
The price you set makes you more or less competitive in the marketplace, affecting your share of the market’s volume. Some businesses lower prices temporarily to gain market share from competitors, who can’t respond to and meet a price decrease. After consumers have had time to try your product and develop a brand preference or loyalty, you can raise your prices again to a level that won’t cause them to leave you. Predatory pricing is the practice of selling a product or service below cost for the specific purpose of taking market share away from a competitor or closing it down, then raising prices on consumers when they have fewer, or no options after that competitor is gone. This is illegal.
Some businesses price products or services at or below cost to get customers into their businesses, who then spend more money elsewhere. For example, big-box retailers might buy large quantities of tennis balls, selling them at or below cost to entice affluent tennis players who use many cans of balls during the year into their stores. By placing the low-cost balls at the back of the store, they hope to generate impulse buys as the shopper walks to the sports area and back to the front. Restaurants offer low-margin specials to offer a change-of-pace to regular diners to keep their normal business, or to let regulars bring friends who want upscale dishes at a moderately priced eatery.
There are many factors to consider when it comes to pricing your product or service. At Guidestone Partners, Inc., we can help you identify and evaluate all the options so that you can maximize your results. For more specific information about how we can help you, please see our budgets/forecasts section under services.
When you have clients waiting for deliverables and prospects knocking at the door, working on refining your process doesn't exactly seem like top priority. It can wait until later, when there is time. But there never is time. And your process never evolves, and you find yourself winging it when someone asks about what your process exactly is. But the fact is, without clearly defining your process, your business can't grow to its full potential.
What do we mean by process? It's having an established, step-by-step way of doing things, and a well-articulated set of internal and external documents and tools supporting it. There are two reasons why process is so key. The first is efficiency. It doesn't make sense to have to reinvent steps each time through. It is a waste of time. Having the right documentation that you can use as a tool saves time, energy and resources. The second reason is scalability. Just because you know how to draw the right elements together to create a strategy doesn't mean that your staff or co-workers can always do the same. And if you leave your company, you take all that knowledge with you. To grow your team, you have to delegate. If you have a process, you can train people to execute on it. With the right training and analytical tools, staff members can gather the crucial elements needed to weave a strategic plan.
Working out your strategic process is no easy task. Our approach is focused on four phases: data gathering, process mapping, process development/refining and implementation. These deliverables are a way of packaging our expertise, and turning it into value for our clients. Clients know in advance what they are getting and that it will be done right.
At Thomas Kellie & Co. our business process improvement services along with our Virtual Consulting services can provide the expertise to identify, develop and implement strategies that can define your process to enable your business to gain the competitive edge to achieve its full potential.
The four stages we focus on are the following:
1. Introduction: The Introduction stage is probably the most important stage in the PLC. In fact, most products that fail do so in the Introduction stage. This is the stage in which the product is initially promoted. Public awareness is very important to the success of a product. If people don't know about the product they won't go out and buy it.
There are two different strategies you can use to introduce your product to consumers. You can use either a penetration strategy or a skimming strategy. If a penetration strategy is used then prices are set very high initially and then gradually lowered over time. This is a good strategy to use if there are few competitors for your product. Profits are high with this strategy but there is also a great deal of risk. If people don't want to pay high prices you may lose out. The second
pricing strategy is a skimming strategy. In this case you set your prices very low at the beginning and then gradually increase them. This is a good strategy to use if there are alot of competitors who control a large portion of the market. Profits are not a concern under this strategy. The most important thing is to get your product known and worry about making money at a later time.
2. Growth: If you are lucky enough to get your product out of the Introduction stage you then enter this stage. The Growth stage is where your product starts to grow. In this stage a very large amount of money is spent on advertising. You want to concentrate on telling the consumer how much better your product is than your competitors' products.
There are several ways to advertise your product. You can use the internet, TV and radio commercials, magazine and newspaper ads, or you could get lucky and customers who have bought your product will give good word-of-mouth to their friends/family/business contacts.
If you are successful with your advertising strategy then you will see an increase in sales. Once your sales begin to increase your share of the market will stabilize. Once you get to this point you will probably not be able to take any more of the market from your competitors.
3. Maturity: The third stage in the Product Life Cycle is the maturity stage. If your product completes the Introduction and Growth stages then it will then spend a great deal of time in the Maturity stage. During this stage sales grow at a very fast rate and then gradually begin to stabilize. The key to surviving this stage is differentiating your product from the similar
products offered by your competitors. Due to the fact that sales are beginning to stabilize you must make your product stand out among the rest.
4. Decline: This is the stage in which sales of your product begin to fall. Either everyone that wants to has bought your product or new, more innovative products have been created that replace yours. Many companies decide to withdrawal their products from the market due to the downturn. The only way to increase sales during this period is to cut your costs and reduce your spending. Very few products follow the same cycle. Many products don't even make it through all four stages. Some products even bypass stages. For example, one product may go straight from the Introduction stage to the Maturity stage. This is the problem with the PLC. There is no set way for a product to go. Therefore, every product requires a great deal of research and close supervision throughout its life. Without proper research and supervision your product will probably never get out of the first stage.
At Thomas Kellie & Co. our outsourced CFO services and Budget/ Forecasting services can guide you through this cycle with proper planning and capital needs identification as well determining which product mix will yield the highest growth potential for your organization.