India’s industrial goods sector, which accounts for nearly 13% of the nation’s GDP, is currently facing a significant challenge. A recent report by Boston Consulting Group (BCG) titled ‘Cracking the Code: Pricing Strategies for Industrial Goods Players in India’ emphasizes that, despite the sector’s importance, many firms are using outdated pricing methods. Most companies still depend on traditional cost-plus pricing and uniform list pricing. BCG’s survey of 81 companies indicates that fewer than 40% have implemented data-driven, customer-specific, or deal-specific pricing strategies. In contrast, international competitors are increasingly adopting advanced analytics, real-time data, and value-based pricing to maintain their competitive edge.
According to BCG Partner & Director Kiran Pudi, who oversees the firm’s pricing efforts in the Asia-Pacific region, pricing in India’s industrial goods sector is largely treated as a back-office function, lacking executive oversight and often relying on uniform pricing. The survey reveals that over 60% of companies primarily utilize cost-plus pricing, which restricts their ability to optimize margins. Although fewer than 40% of businesses have transitioned to dynamic or value-based pricing models, there has been a noticeable increase in the frequency of price adjustments, indicating a growing agility in responding to market changes. Global players are advancing by employing analytics and AI-driven pricing strategies, enhancing their competitiveness in the international industrial goods market.
The report urges Indian companies to shift from reactive to proactive and strategic pricing strategies, with leadership taking the initiative. It encourages investments in advanced pricing methodologies, digital infrastructure, and organizational design to transform pricing into a significant competitive advantage. The report provides a roadmap for Indian industrial goods firms, outlining key strategies in pricing, governance, analytics, and execution to unlock hidden value.