Spare Parts Pricing Strategy (PowerPoint PPT)

This presentation outlines a strategic approach for focusing on part segmentation and market-based pricing to improve proprietary parts business. This document gives an overview of the objectives and scope of the project, parts segmentation methodology, key findings and recommendations, an implementation plan for these positioning and pricing recommendations, and an example for Aircraft pricing package.
The document has the following as appendix:
Appendix 1: Aerospace Proprietary Spares Market Assessment
Appendix 2: Part Segmentation Process
Appendix 3: Aerospace Spares Sales Detail
Appendix 4: Parts Segment Definitions and Sales Detail
Appendix 5: Competitor Price Data
Appendix 6: Model MD A Spares Sales Decline
Appendix 7: Implementation Plan Details
Appendix 8: Internal and External Data Caveats.

See also "Pricing Strategy Workshop"
See also "Solutions Pricing Workshop"
See also "Pricing Strategy Implementation Toolkit"

Client X Aviation Services is facing decreased revenue and lower earnings due to an inability to realize full price in dominant market segments and a failure to respond to competitive pressures. This document emphasizes the need for a strategic focus on part segmentation and market-based pricing to address these issues. By aligning parts by segments based on competitive position, Client X can better manage pricing strategies, from raising prices in strong competitive positions to lowering prices in segments with stronger competition.

The analysis includes a detailed examination of customer purchasing patterns, distinguishing between "loyalist" and "shopper" behaviors. This segmentation helps identify trends and tailor pricing strategies accordingly. The document also provides specific findings by segment, revealing differences in sales and market share, which validate the distinctions in the segments. This data-driven approach ensures that pricing recommendations are grounded in actual market behavior and sales performance.

Consumption data further supports the segmentation by showing customer concentration in specific segments. This insight allows for targeted pricing adjustments, such as raising prices in dominant segments with minimal fear of competitive reaction or lowering prices slightly to encourage repairs over complete upgrades. The document concludes with a comprehensive implementation plan, detailing steps to establish a market-based pricing baseline, identify impacts to inventory, and develop a customer segmentation approach. This strategic framework aims to enhance profitability and market positioning for Client X Aviation Services.