Try the 'True Market' Test First

Article Abstract:

Pricing policies need to be well-designed. Pricing cannot be dictated by internal needs or rising costs, but only on the basis of increased constribution. Other factors such as market share or customer confidence need to be considered in terms of the true market. Information regarding demand, competitors, products and prices, and recent order levels and trends need to be accurately maintained in an up-to-date fashion. Competitiveness should be maintained on all levels. Prices can be changed in other ways than the normal price per unit change such as change in size of products, change in product features, change in credit terms or change in delivery charges. Strategy changes when a product reaches its maturity level. Levels of price cutting need be considered carefully and not drastically taken. Relabelling is not as beneficial as announcing price changes far enough in advance to trigger a lower-price buyout. The timing of price rises and reductions is crucial. A case study is included illustrating the true market test.

Standards, Pricing

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Better Operating Statements for the Marketing Director

Article Abstract:

With rapidly changing industries and the growth of high technology industries, service industries and information industries, revenue and cost structures traditionally used are outdated. This demands a reassessment of the present operating statement. The scope needs to be changed to be effective for strategic planning by the marketing manager. Strategic business areas will be taken into account including customer groups served, customer functions served, alternative technologies, and geographic area. All revenues foregone to attract customers need to be accounted for. Foregone revenues, total delivery resource costs and production costs should be included in a full revenue sales concept. Elements in the marketing realm that need to be figured on are market variables, product variables, place variables, promotion and price variables. Direct marketing costs are broken out on the new operating statement. Examples of the conventional and proposed operating statements are included.

Innovations, Finance, Marketing management, Managerial accounting

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Help the Sales Director Smarten up His Pricelists

Article Abstract:

The price list is an important fundamental document for the success of any business that sells products or provides services. Responsibility for the document rests with the sales director. In order to do this properly the sales director needs to determine the main purpose and primary users of the price list. Next he needs to consider the strategy. Several suggestions concerning layout are included. Examples, including a bad example, are included to illustrate points described in the text. Guidelines for developing prices themselves are also listed and discussed. The relationship of price and contribution to the business is considered.

Prices and rates, Prices, Portrayals, Sales management

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