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The module supports price policy definition, setup of price guidelines, calculations, and simulations of gross, special, and net prices including algorithmic optimization, as well as the rule-based or manual approval of price calculation results.
What typical challenges do business users face in price
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settings?
Slow and laborious mass price updates that occupy the pricing team for weeks
Slow response to changes in cost, competition, and demand
Reducing profit margins resulting from uncontrolled and inconsistent discounting practices
Difficulty managing increasingly complex pricing strategy, rules, and guidelines
Typical User Scenarios for solving the challenges
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Setting up the rules for price calculation on base the basis of different data, parameters, and segmentation (region, type of customer, type of product).
Automated price lists creation on the base of defined rules.
Automated recalculation on base the basis of changed data, like competition, cost, stock, market index, etc.
Approval workflows and approval thresholds for final prices that are not aligned with company targets.
Different price calculation logics depending depend on the region, customer, or product.
Price Setting Key Functionality
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Price Builder contains three sections to explore: Price Lists, Live Price Grids, and Simulations.
Pricelists
When to use it? Pricelist Pricelists are typically used for price setting where prices are not changing very frequently and revisions need to be created on a quarterly/half-yearly basis. It is also a tool for creating different pricelists on the base of the region, product, or customer. Primarily used by B2B businesses.
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How does it work? A Price List is a set of products with a calculated price – the result price. The result price is calculated based on a logic which that contains a set of price calculations rules. All the information that is used in the logic to calculate result results is displayed in the table format and can be filtered. The Pricelist can be automatically approved if the approval rules are met or require additional approval stepsteps. If the Pricelist has been approved than then no further modification can be done, so the pricing manager will need to create a revision if some of the input data for calculations has have been changed.
Typical business scenarios:
Scenario #1: The company has distributors of the product and reviewing reviews the prices quarterly. The pricelists need to have a target and end date. Once the revision process is finished, old pricelists are superseded by the new pricelists that are then sent to distributersdistributors.
Scenario #2: The company resells the products to other businesses and calculated the prices depending on the country and product group. There are different pricelists price lists for different country countries and they are updated on year to year basis.
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Live Price Grids
When to use it? Live Price Grids (LPG) are typically used when a large number of products need to be priced and the prices need to be updated frequently. Companies that want to pursue dynamic pricing strategies usually work with LPGs. Mixed-use of B2B and B2C businesses.
How does it work? The Live Price Grid has a logic, set of rules on how prices are calculated, the outputs of which can be visible in the form of a table. The working principle is very similar to Pricelists. The main difference is that there is a possibility to approve prices directly in LPG as well as manually overwrite the price. The prices can be automatically approved on the base of a set of rules and the items that has have not been verified for automatic approval then will be sent for manual revision of the pricing manager.
Typical business scenarios:
Scenario #1: The company is selling computers via an online shop and orients ist pricing on the base of competition price, inventory, and product life cycle. Separate items that receive new data during a certain period of time need to have a price recalculated.
Scenario #2: In the B2B area LPGs are commonly used when competition data is applied or market index data that is changing and affecting pricing.
To see Pricelists in action, check our video tutorials.
Simulations
When to use it? When pricing manager managers want to see the impact of, for example, target margin change on the final price, they work with Simulations. This functional area offers to use existing Pricelists or Live Price Grids to simulate some changes which will be then underlined by dedicated columns within the simulated Pricelist.
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The product/customer price adjustments needs need to be change changed and we want to see the impact on the result resulting price before changing/reviewing existing pricelists.
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Pricefx offers Accelerate Price Setting Package that can help to start using tool capabilities faster than the traditional implementation approach.
The package is used for Price Lists or Live Price Grid price-setting / management and supports standard Price List, Global and Country Price List management, and Headquarter headquarters and Country Price Lists.
The package provides several "built-in" Price Strategies:
Competition Based Pricing
RRP (Recommended Retail Price)
Promotion Pricing
Cost Plus
Price Increase
Value-Based Pricing
Implementation examples
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Food & Beverage - managing complex pricelist creation and approval process, analytical insights with simulation, data changes monitoring.
To be discussed and deleted later:
FAQ (can be added to later KB releases)
Useful Reads (can be added to later KB releases)