Planning for Best Pricing
To use best pricing, you need to plan analysis codes and price lists. How you use analysis codes depends on how you organize items and customers. How you use price lists also depends on how you organize items, but also on your product structures, and whether you manufacture configured products, offer discounts on quantity volume, and many other factors.
Planning Analysis Codes
To plan analysis codes, do the following:
1 Collect and review your company’s current pricing policies, procedures, and associated structures.
2 Determine the benefit of using analysis codes with your current or planned pricing practices. Analysis codes are best suited to extensive, complex pricing structures.
3 If you decide to use analysis codes, determine how you want to group inventory items and customers in relation to pricing. Establish a list of unique codes identifying these groups.
4 For each customer and item group, determine how you want to select members using the conditions available in Analysis Code Selection Maintenance.
5 Consider the usefulness of combining analysis codes into hierarchical pricing structures. All attributes of child analysis codes are inherited by the associated parent analysis code.
6 Create a visual diagram of how you want to link analysis codes.
7 Review and modify all analysis codes defined and determine how they will be associated with one or more price lists.
Planning Price Lists
In planning for price lists, consider the following questions:
1 Do you offer promotional discounts?
2 Do you engage in joint cooperative marketing agreements with retailers where the amount of cooperative marketing is based on the volume purchased over a period of time by the retailer?
3 Do you use coupons?
4 Do you convert savings resulting from seasonal fluctuations in materials costs into customer discounts?
5 Do you offer additional discounts to customers in a geographical area where a product is not moving quickly?
6 Do you maintain a minimum price for a product that is the lowest acceptable price offered, regardless of the number of discounts?
7 Do you offer volume discounts based on quantity and/or value?
8 Do you negotiate credit terms with your customers?
9 Do you negotiate freight terms and freight discounts with your customers?
10 Do you want some discounts exclusive of all other discounts or combinable with other discounts?
11 Do you want volume discounts based on a range of similar products?