Category Archives: Management Consulting

Defining Price: A Critical Component in the Market Mix

Market researchers have several different techniques for helping manufacturers set prices. Some lead to valuable insights, while others provide only confusion.

Carefully designed and professionally implemented quantitative research and data analysis together provide details that have a significant impact on outcomes.


Pricing is one of the most critical elements of a product in the marketing mix. Companies have to pay money to design a product, to develop/build a product, and to promote a product. However, a product’s price is the only element in the marketing mix which generates an income for an organization. Pricing strategies based on sound pricing research provide companies with a price that reflects the supply and the demand integrated into the relationship.

The Role of Quantitative Research and Data Analysis in Price

There are many types of research tools that help companies identify and discover various pricing models. A few key techniques, presented below, have their advantages and disadvantages.

For the sake of discussion, let’s consider several pricing strategies and then revisit our example question posed in the sidebar: “How does Apple price their phones so successfully?”

  • Gabor Granger Price Laddering:  If a market researcher comes offering price laddering, politely show him or her the door. This technique asks respondents whether they would buy a product at price x, then whether they’d buy at price y, then at price z and so on. Research shows that once respondents have accepted a given price, they’ll feel cheated by any higher price, while lower prices won’t increase their intent to buy. So after that first price is shown, laddering doesn’t yield any useful information.
  • Van Westendorp Analysis: This is a more sophisticated analysis, but it is built atop a shaky foundation. Respondents are asked four questions about price:
    • At what price does the product become too expensive to consider?
    • At what price is it getting expensive but still within consideration?
    • At what price is it a good value?
    • At what price is it so inexpensive that doubts arise about its quality?

The responses are combined into a pricing curve that provides a range of customer-acceptable values. Two problems become apparent: 1) respondents quickly figure out the approach and give lowball prices, and 2) the range is often so wide as to be useless. For example, a manager might be considering a range of $15-$20/unit. Van Westendorp will often tell them to price it between $5 and $25.

  • Monadic Testing: This is the primary technique used by big volume forecasters like Nielsen, and if the normative database is robust enough it can be useful. Respondents are shown a description of the product at a set price and then asked their likelihood to purchase the product. By testing other prices with other respondents, managers can get a sense of the pricing that will be the most profitable. The trouble with monadic testing is its lack of granularity. It can tell only about the prices actually tested. Sure, managers can test a range of several price points, but each additional price can require hundreds more respondents, which gets really expensive really quickly.


  • Discrete Choice: This is the best approach to survey-based pricing research. It simulates customers’ real-life purchase decisions by giving them a series of choices between sets of competitive products, each with price, brand, volume, level of service and other important product characteristics. The design can test several individual price points and the analysis can extrapolate the customer appeal for prices between them. Beyond that, though, it can then show the relative importance of each product characteristic and identify the optimal level within each – helping product managers optimize product development and focus resources. Its inclusion of competitive products also makes it a tool many manufacturers and marketers rely on for scenario planning. But discrete choice can be more expensive than other options, and without careful design it can lead respondents to be more rational than they would be in real life. When done well it provides clear insight on a range of issues, pricing included.

So which pricing approach does Apple use? None of the above – not even discrete choice. Apple doesn’t ask consumers for direction; if it did, it would probably hear that prices need to be lower…and yet people still line up to buy the latest iPhone. Apple designs products and systems, calculates the value that they will hold to the customers who will get the most out of them and prices them accordingly. Pricing lower would certainly increase share, but Apple’s focus is on a more important measure: profits.


Context sees the value of quantitative customer research as an input that, when combined with deep industry understanding, can inform value-based pricing. This approach empowers clients to price strategically for their specific objectives.

Contact us to discuss your market research needs. Context provides a wealth of expertise in quantitative and qualitative market research design and data analysis, R&D, volume forecast modeling, insight generation and deployment, new product development and business plan creation, and competitive intelligence and market intelligence.


Leading Strategic Change – A Key to Change: Deep Organizational Engagement & Involvement

We have the most educated workforce in human history. Younger generations of workers desire an opportunity to use their intellect to create and innovate. Many from the younger generations have grown up in more inclusive and team oriented environments, hence top down decision making and “marching orders” are less warmly received today than in the past. Our workforces are looking for greater degrees of leadership transparency and engagement. We are in a global transformation from command and control to self-organizing networked organizations. 1

Coupled with a changing workforce are our organizations’ cultures. What are cultures? The 1992 classic definition of culture is from Edgar Schein 2 “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relations to those problems.”

We are experiencing three noteworthy and converging forces simultaneously:

  • A significant generational change between the Boomers exiting and a highly-educated work force
  • Cultures that recycle proven steps, methods and processes which have solved problems of the past
  • Highly-dynamic marketplaces that are in constant flux with new products and services needed to maintain the competitive edge.

How does senior leadership implement new strategies and not have their culture eat it for breakfast?  Our first tenet in Leading Strategic Change is “Involvement.” Younger members of today’s workforce wish to be engaged and involved. They want to be connected to:

  • the DECISIONS that affect their customers
  • the TEAMS with whom they work
  • the SUPPLIERS they resource
  • the IMPLICATIONS to their own work habits, preferences and lives.

Ultimately, these highly capable workers wish to contribute their knowledge, experiences and skills to new policies and procedures. They seek full investment in new ideas, concepts and strategies.  

So when does leadership decide and announce versus deeply engage, gather, decide and announce?  It depends. If a rapid competitive situation, supply chain or regulatory issue exists, then senior leadership many need to take the traditional top down approach. If the strategy has deep, long term implications, will create significant change and will result in culture change, we recommend taking a deeper approach of employee engagement. The Context Network has resources to help plan and facilitate employee engagement creating involvement that will make Leading Strategic Change more sustainable and successful.


1 The Economist, November 23, 2013, pg. 68

Schein, E. H. (1992). Organizational culture and leadership (2nd ed.). San Francisco: Jossey- Bass

Don’t Shortchange Tomorrow

It’s commonplace and understandable. You are running your business. Making decisions important to keeping product flowing and customers happy today. You wish you had more headcount to operate the business that you’ve worked hard to build over the years but for various reasons, you are thin on headcount and you, as the business lead, find yourself spending much of your day ensuring that today is operationally successful. We all know and appreciate the adage: without a successful today, there cannot be a tomorrow.

To be clear, “tomorrow” in this context does not mean literally tomorrow, or next week, or next month. It is used to convey the “future,” whether it be one year, three years, or even farther out on the calendar.

Who in your business is charged with “thinking about tomorrow?” Who is your “future state provocateur?”

It’s here that we need to be honest. This is not a casual exercise. The world moves fast and laws, regulations, cost of doing business, competition, labor, commodity prices, speed of communication, consumer demands and any number of other variables specific to your business can batter you about. Thoughtfully anticipating the future state and, in turn, making decisions (sometimes very tough decisions) to position your business for success in the anticipated future state can be daunting when you are consumed with the real operational challenges of today.


I question the notion that, “If I just had more people resources to take care of the operations of my business, I could spend more time thinking about how my business should be resourced, organized, positioned in the market and supported with additional investment.” Even if you did have more time, would you and your leadership team be wholly-equipped and appropriately unbiased in your assessments that would then lead to the critical resource, strategy and market positioning decisions that will support a successful tomorrow?

It is so easy to become personally invested and self-admiring of your current business position that objectivity can suffer. Yes, your resident experts understand your business. But are they really stretching your business planning into new spaces, with new market approaches and new technologies?

While best efforts are always put forward, experience shows that substantive changes more often come about as a result of honest and frank challenges during the assessment and planning phases. And most businesses that are focused so heavily on today do not experience the thought-provoking stretching that gets them to the new place they need to be for tomorrow’s success.


Context can help

MCStory7Image3Our team of executive professional Partners and Associates represents a broad array of functions in which they have demonstrated success, both in their own businesses and now in working with other companies seeking another set of eyes, ears and more integrative thinking. Call on us and let’s discuss where you want to take your business “tomorrow.”


Make Internal Meetings More Productive and Shorter

“Ask your team to identify their biggest productivity challenges and they will undoubtedly point to their internal meeting schedule as a “biggy.” Here’s one novel idea along with a few simple practices that can make internal meetings much more productive AND shorter.” – The Context Network Principal, Mike J. Borel

Eliminate the presentation. Ask that materials that would typically have been presented, be sent out to participants at least 24 hours in advance so people can familiarize themselves with the content.

Just because the material has been sent doesn’t mean it will be read. Begin each meeting by providing attendees 5-10 minutes to read through the deck. If people have already read it, they can refresh their memory, identify areas they’d like to go deeper on, or just catch up on email.

After the first few times you kick off a meeting with silence, it won’t be awkward – it will be welcome. This is particularly true when meetings end early and participants agree it was time well spent. In this format, a meeting that had been scheduled for an hour is often actually complete in 20-30 minutes.

Remember, there is no presentation! Once the reading is completed, it’s time to open it up for discussion. Stay vigilant on this point as most people who prepared the materials will reflexively begin presenting. If you are concerned about appearing insensitive, constructively remind the group this is a new practice that will benefit all meeting attendees, including the artist formerly known as “The Presenter.”


With the presentation eliminated, the meeting can be exclusively focused on generating a valuable discourse: providing shared context, diving deeper on particularly cogent data and insights, and having a meaningful debate. The need for clarifying questions will be kept to a minimum with well-prepared material simply and intuitively articulated. In addition to “eliminating presentations in favor of discussions,” the following are highly valuable practices that greatly contribute to running effective meetings:

  1. Define, state and review the objective of the meeting. This can prove invaluable, ensuring everyone is aligned and focused on keeping the meeting on point. Consider including the meeting objective on the cover sheet.
  2. Identify who is leading the meeting. Each meeting needs one leader whose primary roles are to keep the conversation relevant and to see that no one person ends up dominating the discussion. Adjunct discussions that arise during the course of the meeting will be taken offline.
  3. Assign someone to take notes. Choose someone well versed in the meeting’s objectives, who has a clear understanding of context, and can capture the most salient points. This avoids the classic multiple people recalling one event in multiple ways — and also creates a plan of record for what was discussed and agreed to. This can also be particularly valuable for invitees who were absent.
  4. Summarize key action items, deliverables, and accountability. Summaries usually are the first thing to suffer if the meeting runs long and people start running off to their next scheduled event. However, it’s arguably the single most important thing you’ll do at the meeting (and is ostensibly the reason for the meeting to begin with). Have the discipline to ensure attendees remain engaged while next steps are being discussed and assigned.
  5. Ask what you can do better. Gather feedback at the end of meetings. It takes very little time. Ask whether or not the attendees found it valuable and what could be done to improve it in the future. There is no better way to ensure the meeting is necessary and effective. If it’s not, either change the objective and/or format, or take it off the calendar.

Context facilitates a great number of meetings, and participates in many client meetings. We hope you find these suggestions valuable and give them a try.

(This article includes portions adapted from a LinkedIn article I found particularly interesting an “on point.”) MJB

Lessons from Africa: The Importance of Production Research

During a recent consulting trip, I was working in Northern Nigeria with a company called MANOMA SEEDS Ltd located in Funtua operating in Katsina State. This is a start-up company producing mainly open pollinated variety (OPV) maize seed. The company wanted to switch to hybrid maize seed as customer demand for hybrids has increased.


In most cases, the company would make a request from the national maize program. They would ask for a small quantity of a hybrid maize seed variety that has been released to put in demo plots and plant in key villages so farmers can see the advantage of the hybrid maize over a local variety they are planting today. This is a good strategy if the seed is available from the breeders. However, there is a big challenge for a company changing from OPV maize production to hybrid maize production.

OPV maize seed: Production is mainly an increasing of the seed to the next generation with no need to de-tassel, nor the required isolation for certification.

Hybrid maize seed: Requires two parent lines. You need to de-tassel the female, determine the number of male rows necessary for required pollen shedding, and identify the timeliness of planting between the male and female rows to optimize reproductive stages; pollen shed of the male and silking of the female plants. In addition, fields must have isolation from other maize to be certified. (Example: two rows of male and six rows of female parent lines.)

In many cases in the past, the national maize breeding program in Nigeria did not have the capabilities or resources in their program to record observation notes under the different environments in which companies’ crops are being grown. Their main focus was to release hybrids, which in their judgment, were easy to produce, (e.g. top crosses hybrids.)


With the drive for higher yield, farmers are moving to more three way crosses which are more difficult to produce but provide higher performance.

At the same time, it is important to recognize that a hybrid released in the Kano area of Nigeria may perform very well in that environment, but in the Jos area, it has poor performance. This is much like in the US where a hybrid that performs well in central Illinois may not perform well in central Indiana. When it comes to the production of the different hybrids consideration must be given to the inbred lines used in the production process to make sure they are adapted to the area where they are going to be grown and the hybrid being produced. Below is an example of hybrid development in area where the male line is not adapted, resulting in no seed set and financial loss for the company.

This situation can be avoided by the process of Production Research. Production research involves planting the parent material to be used in production in the area where you are producing it. Then, a careful observation process of the lines throughout a growth and development cycle allows researchers to track each parent line’s strengths and weaknesses. For example, through intensive note taking during the growing season, researchers may track dates and conditions of when the line reaches first silk, first pollen; then 50% silk, 50% pollen, disease presence and susceptibility, stalk strength, and many other factors that are critical for production maturity, yield of line and germination of the resulting seed as a hybrid moves toward large scale production.



Production research data can greatly help determine how the lines perform in the different environments. For example, line A is approximately five to six days later than line B. Therefore you would have to plant line A five to six days earlier than line B to obtain synching of the lines for pollen and silk. In this example line A would be used as the female and line B would be used as the male in 1:4 male to female ratio. (Note: in the US, growing degree days are used to determine the maturity of the lines vs. days that are used in Africa at this time.)


Line A (left in above picture), and Line B (right in above picture)

More companies in Nigeria now understand the benefits and the needs for a production research function. They are understanding the importance of a comprehensive system of production research in contrast to research that solely focuses on ability to produce possible hybrids, the cost of goods, etc. Production research considers all of these factors together, including quality, purity and germination. Ultimately, production research best identifies parent lines and production methods that will result in new hybrids – hybrids suited to perform well in the given environment.

In the production of hybrid maize in a country like Nigeria, it is important to understand the technical risks and demands of moving from OPV maize to hybrid maize. A well-organized production research effort will pay dividends short and long term. In many cases, a company can use this process for training of contract growers/out growers on the production of the hybrid at the same time. Small risks and learning experiences at this stage make a major difference in profitability and becoming a dependable supplier of high performing hybrids.

For more information, contact Dave Westphal, Context Senior Associate at

Portfolio Distractions – Figuring Out What to Stop Selling Can be Hugely Important

“General Managers and Portfolio Managers, this article is for YOU.” – Mike Borel, Context Partner

Context conducted a project for a regional business of a global company that identified products and SKUs that were taking more time than they were being charged, and therefore, reducing effort on other products. What did they do? Removed 25% (by number, half that by revenue) of a portfolio! Read on to know the story and the results.

Portfolio distractions cost money, time and opportunity. Let me tell you about a “real life” project we led on this subject. The client was a multi-country region of a major crop protection company with roughly 2000 SKUs which included old and new active ingredients, high margin and mid-range margin, and various formulations and pack sizes. The business was profitable overall and no individual SKUs were losing money – at least they were not losing money based on the accounting done.

Investigating the portfolio for possible distractions was an idea initiated by Context and ultimately driven by the general manager of this region. This manager wanted more time and energy on the newer and higher margin products and commissioned the study/project. The project was decidedly opposed by the Sales Managers and Country Managers – so much so that we talked often during the process about having a target on our front and back (see cartoon).


We dug deep to find out how much sales and other time was actually going to each product or SKU. This resulted in a new financial summary. We then identified ~500 SKUs (including more than a few AIs) that were taking time and distracting the organization from doing everything possible to sell high margin and new products. We proposed some for sale, others simply for abandonment. The sales organization went crazy trying to stop this. The manager powered through (which was key) and made the changes.

What were the results? In the very next season, sales increased and margin/EBITDA increased even more (on only products that were in the portfolio the prior year). Everyone involved, including the sales team enjoyed a better bonus. The opposition went away.


The Math:

100% (yr 0) – 12.5% (end of yr 0) = 115% (yr 1)

Context has the experience, knowledge, processes and resources to do this job for you. Interested? Contact us to discuss possible portfolio distractions in your business.

Cartoon © Gary Larson available at

Generating Big Ideas

Generating “Big Ideas” is key to strategic thinking. Big ideas are those that enable your company to grow considerably faster than others in the industry. They can be simple and straightforward, or big, bold and appear intimidating.

The understanding of ideation thinking has advanced significantly. Different from brainstorming, ideation requires critical thinking and a more structured approach to an end result. The ideation process is divided into four stages:


An idea not implemented adds zero to your balance sheet or income statement. This final step involves a lot of hard work, so remember why you started on this journey: you want your company to be a winner. Context has ideators and the ability to facilitate this process for you. Call us to discuss.

“Coming up with big ideas is an ultimate value activity to keep your company thriving in today’s intensely competitive marketplace.  Industry research shows that 80 percent of companies know big ideas are necessary for success, but only four percent know how to generate them!  Context’s leadership in strategic business consulting allows us a unique perspective to help companies working toward discovering, evaluating and implementing “Big Ideas” effectively.” – Context Principal, Mike Borel,

Metrics, Measurement and Scorecards

What you measure is what you get. The organization’s measurement system strongly affects the behavior of managers and employees. The most fundamental reason to measure an activity is to improve it. Financial measures alone, like return-on-investment and earnings-per-share, can give misleading signals for continuous improvement and innovation – activities today’s competitive environment demands. Getting the metrics right is one of those “easy NOT to do” things. It’s not difficult, but does require some focused energy. The best news is that done well and embedded in the organization, it will pay major dividends.

Multiple Metrics are Needed to provide a Balanced Scorecard (BSC)

No single measure can provide a clear performance target or focus attention on the critical areas of the business. A balanced presentation of both financial and operational measures is needed. Made famous by Kaplan and Norton, and further improved by Schiemann & Lingle, The Balanced Scorecard links performance measures:

  1. Customers/Markets: Are we meeting customer or marketplace expectations?
  2. Financial: How do we look to shareholders?
  3. People: Are we deploying our human resources effectively, including employees, partners and suppliers?
  4. Operations: How efficiently are we running the enterprise?
  5. Adaptability: Are we responsive and innovative in our approach to changing requirements both internally and externally?
  6. Environment: Are we dealing with community, environmental and regulatory forces that define our playing field?

Context has the capability, working with management, to determine appropriate leading measures in the six key strategic areas, and to embed the balanced scorecard metrics into the organization and organization processes. Bringing metrics for these areas together in a single management report is crucial. It guards against sub-optimization. By forcing senior managers to consider all the important operational measures together, the balanced scorecard lets them see whether improvement in one area may have been achieved at the expense of another.

Measure Hard Results and the Soft Stuff Will Follow

What are key elements for implementation of a good Balanced Scorecard? Communication of strategic goals that are linked to individual objectives is critical. It allows organizations to link strategic goals with business unit targets, individual performance objectives and rewards and recognition. In addition, it allows companies to develop proper targets that verify and support your strategy. Secondly, BSC metrics must be integrated into the strategic planning and budgeting process. This step allows organizations to harmonize short- term financial performance with long-term strategic goals and growth opportunities. Finally, a solid set of BSC metrics must include a mechanism for continuous feedback – for strategic learning and for the occasion to adjust as new threats and opportunities arise.


Leading vs. Lagging Indicators

One clear advantage of BSC metrics is they allow us to effectively see the whole picture. We are all used to “lagging” indicators – i.e. the results we can measure after they’ve occurred – profit, market share, etc. They have a place, but are not useful for proactively making adjustments in season. “Leading” indicators, on the other hand, are ones you can measure in real time and are directly related to achieving the key business objectives. They require some thoughtful processing to identify as there is not a handy list that are “known to be right” for your business.

Know What to Expect – Focus on Implementation

Companies adopting and implementing a BSC model must determine what to measure in the 6 key strategic areas of customer markets, financial, people, operations, adaptability and environment. Then, they must embed the BSC metrics into the organization and its processes; link strategic measures to compensation, tie strategic measures to the performance management system, and track and manage strategic performance measures.

Although this sounds easy, it is not. Simplicity is often deceptive. This involves some hard questions, but a Balanced Scorecard of metrics is more than a measurement system; it is a cornerstone of strategic management. 

The old adage, “Measure twice, cut once” reminds us how critical it is to measure effectively to both avoid making costly mistakes, and make the most out of our goals. Context is ready to help your company deploy metrics that will best assure positive performance. For more information, contact Context Partner, Mike Borel at


William A. Schiemann & John H. Lingle; Robert S. Kaplan & David P. Norton; William L. Simon; Tony Hope & Jeremy Hope; Peter F. Drucker

Can Being Big Get You Closer?

When Trends Collide

Tesco recently discussed plans to rationalize its supply base and source more fresh produce directly; to become “a more vertically integrated business.” Recent developments in direct sourcing, such as this announcement by Tesco or by Wal-Mart opening a direct buying office in Yakima, WA (2009), provide notice on how large retailers are dramatically reshaping fresh produce supply chains.

Through direct sourcing, retailers locate direct buying offices near major production areas to establish their own relationships with growers and put infrastructure in place to work with them directly; in effect bypassing shippers. Motives are both directly and indirectly economic: reduce distribution cost and establish proprietary systems to ensure food safety risk and traceability are being managed.


Verticalization is not new. In the U.S., many large retailers have already worked past produce brokers and percent of produce flow through terminal markets has been halved over the past 40 years. While shippers were an important champion of those historical trends, they now are in the cross-hairs of direct souring rationalization.

Meanwhile, local sourcing is becoming a permanent fixture within the year round supply of fresh produce. Initially predicated on fuel cost savings, the trend towards consumers buying local grown produce has morphed into satisfying their wants for supporting community, protecting the environment and advocating food systems. Sales of local produce are growing fast.


Retailers are being forced to reconsider their traditional approach to optimize cost through fewer and larger suppliers in favor of driving top line growth.  Local grown is demonstrating that satisfying preferences of fresher, better tasting produce lifts sales and retains customers.


Tough Decisions and Support Systems Needed

For large retailers, direct sourcing necessitates adding field staff, information systems and possibly even facilities to manage and maintain direct grower relationships. Similarly, for retailers to source local grown produce, buying systems need to be supplemented. In the future, innovative information and distribution systems are needed including supplier hub websites, traceability programs and product consolidation. In addition, supplier training will be required to help growers achieve industry or retailer specific technical standards or develop customer -specific packaging.

Direct and local sourcing trends diverge when considering the source; the farms producing the produce. Through direct sourcing, the tendency is for retailers to gravitate to a select number of large growers. Local sourcing legitimizes smaller suppliers outside of major growing areas, allowing them to sell beyond the farmers market to large national and regional retailers. At least early on, systems to support both sourcing initiatives will need to differ.

Retailers need to weigh the benefits of rationalizing the supply chain through direct sourcing and driving sales through promoting local grown with one very large common denominator: RISK. Direct large grower relationships place retailers in a more exposed position to production uncertainties. Direct sourcing is a proven cost savings approach when supply is ample. When supply becomes tight, exposure to higher cost increases. Local small grower relationships also bear supply uncertainty because of the seasonality and higher variability of local production areas.  Also, areas outside of major production regions typically have fewer food safety safeguards in place.

Getting the right systems in place to deliver on the benefits of these two major sourcing trends and effectively manage their risks will determine which retailers are successful in the fresh produce supply chain of the future.

Thinking about Fresh Produce? Contact Mark Nelson at or