What is the role of the Pricing Department in the supply chain?

Pricing is a technique of determining the sales price based on a market-defined price. On the basis of this, a change of expenditure is made, in order to identify the usefulness that the market allows, which results from comparing our costs against the price of the product put in plant or that is the same at the market price subtract related expenses; In international trade, the exporter is based on the price put in plant, to which the costs related to international logistics must be added. Thus, the exporter will have price alternatives, depending on where the goods are delivered.

 

Pricing is a challenge that we often face, as the constant change of the market makes it increasingly difficult. Therefore, consolidating a Pricing strategy will allow you to make excellent profits, grow at a steady pace and maintain a good profit margin.

Pricing focuses on setting prices that bring value to the customer, but also determines sales prices that are profitable for each business. When you establish a Pricing strategy based on the value the customer gets from the results, you leave aside the traditional way of evaluating the sales prices of a product and/or service, that is, the price based on the cost.

The goal of establishing the Pricing is that the two parties (company and customer), win and thus obtain the maximum possible profits, improve the prestige (both the company and the customer).

Strategic elements of pricing in the supply chain 

1.- Development of marketing strategy (Perform marketing analysis, segmentation, targeting and positioning)

2.- Make marketing mix decisions (Define product, distribution and promotional tactics)

3.- Estimate the demand curve (Understand how the demanded quantity varies with the price)

4.- Calculate cost (include fixed and variable costs associated with the product)

5.- Understand environmental factors (Assess likely competitive actions and be aware of legal market issues)

6.- Set the objectives of the "Pricing" (Price stabilization, profit margin, income maximisation)

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