Tactical Decisions: Pricing

Pricing decisions can be a complicated undertaking that requires knowledge of the market, competitors, economic conditions and, of course, customers. For this section it is not necessary to provide extensive financial evaluation of the pricing decision since most of this will take place in Part 5 Budgeting and Implementation, however, the use of tables and graphs may be helpful in showing pricing trends and pricing decisions within various categories. (Length: 1-2 pages)

• Brief summary of current pricing decisions:
  • Describe pricing decisions by:
    • model/product
    • segment
    • channel
    • geography
    • other
  • Adjustments and Allowances
    • Discounting
    • Payment terms
• Identify planned changes
  • Summarize changes
  • Justify changes:
    • Due to results
    • Due to research
    • Due to competition
    • Other
• Describe planned changes:
  • Objectives
    • e.g., return on investment, market share, profit level, price leadership, match competition, etc.
  • Factors affecting price setting
    • Cost factors
      • Fixed costs to be covered
      • Variable costs
    • Customer expectations
    • Company expectations
      • e.g., margins, ROI
    • Demand Considerations
      • market elasticity
      • position on product life cycle
    • Competition
    • Economic conditions
    • Legal/regulatory considerations
  • Pricing Options
    • list, preferred or suggest pricing
    • adjustments and allowances
    • sub-divided by:
      • product/model
      • customer
      • channel
      • other

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