The complexity of pricing lies in the fact that your sales territory is usually not a single homogeneous market but one that consists of many Micro Markets.
Each of the Micro Market displays a different Price Demand curve due to different factors at play in Micro Market conditions, including the following:
The complexity of pricing gets multiplied with number of different products and competing brands involved.
While the pricing is a complex subject as above would indicate, the impact of getting pricing right has direct implications on bottom line. Get it too high and you lose on volumes, get it low and you lose on margins.
It is possible to conceptualize the Price demand curve, however given the number of micro markets and changes in factors that drive the behavior means it is not possible to make decisions based on static data. In other words, practically, each micro market has its version of Price-Demand curve, and it changes as frequently as the underlying factors change.
Hence Price Tracking is a crucial function that needs to deliver dynamic, reliable, practical and real time intelligence to serve as the basis of Pricing decisions.
Price tracking is only one component of Pricing. In volatile price conditions, not only right decisions for pricing need to be taken quickly, but these need to be propagated to field work force with due controls.
Following are the issues in Price setting:
With Outreach, we have a proven solution that addresses Price tracking and price setting issues:Authorization control for price tracking and setting: