Integrated Pricing

Posted in Marketing and Strategy Terms, Total Reads: 767
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Definition: Integrated Pricing

Optimizing the firm's net income, in order to achieve a sustainable pricing advantage. It is done by setting prices of goods and services for each revenue operating department .Letting go of old values and adopting it new dynamic and integrated approach requires cultural changes in the organization. It needs to Transit from a cost pus approach to a more integrated approach.


3 key steps for adopting integrated pricing strategy:

1. On basis of internal and external demand drivers, pricing of the goods and services can be optimized by validation of data comprising of market demand, price, elasticity, switching costs, capacity and profitability.

2. In order to compete with others, ensure a competitive value offering for a different segment of consumers.

3. An intelligent, proactive, real time pricing model, which is combined with statistical data and market data to provide the organization a competitive advantage by changing pricing based on the ever-changing critical factors of the market.


For example:

Dell, predicts its future sales and according to that adjusts the pricing. In order to maximize revenues it used its supply chain and customer demand visibility to get information about the changes in their demands and adjusts price accordingly.

Adjusting pricing proactively also helps to optimize top-line performance and also fix problems which were in fixable, due to lack of data:

Customers and products which have low contribution.

Inconsistency in data leading to data leakage.

Due to difference in regions, account sizes, volumes there is dissonance in pricing.

 

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