ABSTRACT
Companies that have enjoyed a long history of success and profitability, even those that occupy the premium space in their category, have seen significant challenges during the last few years of economic crisis. The recent collapse in demand in many industries, combined with a reduction in available capital, has caused customers to rethink the products they need and how much they are willing to spend. “Good enough” has become a more common refrain and customers are now more willing to make trade-offs between performance and price. This shift in thinking has forced companies who sell in the premium segments to prove and dollarize the value of their products and services like never before. It has pressed many historically cost-plus organizations to consider a move to a more value-based way of thinking. A purely “cost-plus” or margin driven mentality can leave a company vulnerable to under-or overpricing, margin deterioration, or volume loss.
