Pricing and positioning for the Single European Currency – the state of play among Northampton small and medium‐sized enterprises

Pricing and positioning strategies are of increasing strategic importance and are crucial to the long‐term competitiveness of small and medium‐sized enterprises (SMEs). Following the introduction of the Single European Currency (referred to as the “Euro” throughout this paper), the paper suggests that there will be a major squeeze on price differentials between European Union (EU) member states, creating a danger that existing price‐based positioning strategies will be undermined. This “European pricing and positioning time bomb” will affect UK SMEs (as well as larger businesses) over their short‐term planning horizon, even if UK entry into the Euro is delayed indefinitely. Strategic responses to the Euro will be most effective if they are planned and implemented at the earliest possible time. This paper explores and analyses the findings from a small sample survey of export‐active, consumer goods manufacturing, Northampton SMEs, carried out in late 1997. The aim is to establish their existing pricing and positioning strategies for EU Europe, their preparedness at that time for the introduction of the Euro and the main forms which their pricing and positioning strategies for the Euro were then taking. The findings suggest that most of the SMEs surveyed were in the early stages of planning for the Euro, but that many had not yet fully grasped its strategic marketing significance. Three categories of current marketing postures are identified: price standardisation, price but not product differentiation, and price differentiation supported by product differentiation between EU markets. The paper concludes by evaluating the effectiveness of responses based on these three alternative categories to the new marketing environment in EU Europe that the Euro will create. A set of strategic recommendations is also made for SMEs’ pricing and positioning strategies in the Euro context.