Competing without Discounting

The real reason your margins are under pressure may not be pricing

Canadian manufacturers find pricing pressure often amplified by factors like a smaller domestic market, reliance on U.S. customers, increased regulations/tariffs and increased global competition.

Quite often, manufacturing and technical companies find themselves talking about lowering prices to the point where margins start disappearing. Pricing pressure shows up, in many conversations, as a sales problem.

Deals that don’t progress. Procurement pushes harder to get better pricing. Margins start to erode.

The instinct, then, is to adjust pricing, offer concessions or “communicate value more clearly.” All tactical responses.

At 6P, through our work with so many clients, we see a pattern: pricing pressure where there is not necessarily a pricing issue.

Not always, but quite often, that is a signal that the company may be competing in the wrong place. And that is a positioning issue.

If price is driving the decision, you have already lost the positioning battle

When companies find themselves repeatedly discounting to win business, the main cause is often structural and points to competing in the wrong space:

• Competing in segments where the problem is not urgent
• Buyers have multiple acceptable alternatives
• Differences between vendors are difficult to assess or do not materially impact outcomes
• Purchasing decisions are designed to compare suppliers side by side

It’s true: If this is your environment, then price often becomes the default decision driver.

It is not because your solution lacks value. It’s because the context makes that value difficult to prioritize.

Pricing power is earned long before the sales conversation starts

This is where commercialization strategy becomes critical.

The strongest opportunities are not always in the largest or most familiar markets. They exist at the intersection of three factors:

• Market need: where the problem is most acute
• Competitive gap: where existing solutions fall short
• Capability: where your organization can deliver meaningful impact

When these three elements align, the conversation changes. You are no longer one option among many. You are solving a problem that matters, in a way that others cannot easily replicate.

Outside of that intersection, even strong companies get pulled into price-based competition. That doesn’t mean they lack capability, however it shows that they are operating in environments that default to price comparison.

It’s time for manufacturing and technical companies to recognize that positioning and value articulation do matter.

Yes: clear messaging, relevant use cases and strong sales tools all contribute to better commercial outcomes.

But they are not a substitute for strategic alignment.

Positioning cannot compensate for:

• A weak or non-existent competitive gap
• Low urgency on the buyer side
• Misalignment between what you do well and what the market values

And that’s where so many organizations struggle. They invest in marketing and sales enablement while continuing to operate in segments that naturally compress margins.

Even the best messaging will fall flat if it does not reflect real buyer needs or support how decisions are made in the field. As we have presented in previous articles about distributor-driven environments, the unclear or generic positioning quickly turns strong products into “just another option”.

Pricing power emerges when some conditions are in place:

• The problem is urgent.
• The alternatives are insufficient.
• Your capability changes the outcome in a meaningful way.
• And that difference is clearly understood.

When this happens, price remains part of the conversation but it is no longer the primary driver.

You don’t fix margin at the negotiation table

For organizations looking to protect margin, the key question doesn’t end at “How do we price this?” but “Where should we compete?”.

Because margin is rarely recovered at the negotiation table. It is built earlier, through deliberate choices about where to compete and how to win.

If you are finding yourself repeatedly discounting to win business, it is worth asking whether the issue is really pricing. In many cases, it points to where you are competing, and whether that is the right place to compete at all. If that conversation would be helpful, we are always open to share best practices on how others are approaching this challenge.

Please reach out to our manufacturing sector lead Dafne Orbach if you want to chat.

Email: [email protected]