Introduction

The section is about the setup and configuration of pricing levels and strategies in PSP. It demonstrates how to set up the fallback and generic keys for price lists and shows the various tables and libraries used in PSP. You will also see how to create a new price list and apply filters to it.

It discusses issues with calculating price lists in the PSP system, specifically related to pending calculations and server capacity. It also demonstrates how to set up and configure pricing levels and dependencies in the system.

For best results start troubleshooting from the top and uderstand the importance of proper data setup for accurate calculations.

Learning Objectives

Core topics and takeaways:

• Understanding the setup and configuration of pricing levels and strategies in PSP.

• Learning how to set up fallback and generic keys for price lists.

• Exploring the tables and libraries used in PSP for pricing configurations.

• Understanding how to create a new price list and apply filters in PSP.

• Learning about calculating prices, strategies, and data flexibility in pricing configurations.

• Understanding the concepts of independent and dependent pricing strategies in PSP.

• Exploring the minimum data requirements for installing PSP and setting up installations for different source types.

• Learning about configuring pricing levels, mapping them to CSV files, and installing packages in PSP.

• Understanding the process of setting up a new price list in Price Effects.

Video Highlights

Learning Highlights

• Flexibility in table data:

  • The pricing level name is generally in the table name.

  • Different tables can have different setups for data.

  • Data can depend on attributes like SKU and pricing level name.

  • The data can also be dependent on other factors like property.

• Dependent and independent pricing:

  • The configuration allows for setting some pricing strategies as independent and others as dependent.

  • Dependent pricing strategies can calculate prices based on the previous one plus adjustments.

• Installation data requirements:

  • The bare minimum data needed for installation includes attributes for segmentation, such as industry, business unit, and product group.

  • The cost and plus values are required for calculating Cost Plus, with the cost data already placed in the table.

• Mapping pricing levels using CSV files:

  • The configuration can be done using an Excel or CSV file.

  • The file is parsed to ensure correct setup of the parser.

  • The columns in the file need to be named correctly for successful mapping.

  • The next step involves setting up the fallback keys for generic cases and the specific keys for different hierarchy levels.

• PSP installation:

  • There are different libraries for PSP and its dependencies.

  • The number of tables in PSP depends on the levels and parameters.

  • The number of tables increases with different pricing levels and strategies.

• Pricelist creation:

  • You can create a new price list, calculate it, and review the results.

  • The speaker suggests using the same filter and dataset as before.

  • Different logics and templates can be set up to customize the price list creation process.

Core Learning Concepts

The following are the core learning concepts from this learning path:

Main issues with price list calculations in PSP

The main issues with price list calculations in the PSP are related to the setup of pricing levels and strategies, configuration of product master with key attributes for segmentation, and the importance of data tables for cost calculations.

Defining pricing levels and strategies

In PSP, pricing levels and strategies are set up by configuring strategy selection, defining flexible data tables based on attributes and pricing levels, setting up issues, severity levels, and selecting dependent or independent pricing strategies.

Additionally, the setup includes configuring installation preferences, providing dimensions, source types, and currencies, and establishing keys for the pricing process.

To setup pricing levels, do the following:

• Define the different pricing tiers or levels based on product categories, customer segments, or market conditions.

• Configure the pricing rules and strategies for each pricing level, considering factors such as discounts, markups, and pricing adjustments.

• Establish the relationships between pricing levels and product attributes to ensure accurate pricing calculations.

• Test the pricing setup to verify that the system calculates prices correctly based on the defined pricing levels.

• Monitor and adjust pricing levels as needed to optimize pricing strategies and meet business objectives.

To setup strategies, do the following:

• Define the different pricing strategies based on your business objectives, such as cost-plus pricing, value-based pricing, or competitive pricing.

• Configure the pricing rules and parameters for each strategy, including factors like pricing thresholds, discounts, and promotions.

• Associate the pricing strategies with specific products, customer segments, or market conditions to ensure targeted pricing approaches.

• Test the pricing strategies to validate their effectiveness and accuracy in calculating prices.

• Monitor the performance of the pricing strategies and make adjustments as needed to achieve desired pricing outcomes and profitability.

PSP and price strategy selection

Pricing strategies in PSP refer to the approaches and rules used to determine the prices of products or services. These strategies can include cost-plus pricing, value-based pricing, competitive pricing, dynamic pricing, and more.

Price strategy selection is typically done by analyzing various factors such as product attributes, customer segments, market conditions, and business objectives. The system may use predefined algorithms or user-defined rules to determine the most appropriate price strategy based on the input data and criteria specified. PSP can automatically select or recommend the optimal price strategy for a given scenario.

Key attributes to configure in product master for segmentation

By configuring core attributes in the product master, businesses can effectively segment their products and customers for targeted pricing strategies and accurate cost calculations. This segmentation allows for personalized pricing approaches and tailored marketing strategies to different customer groups or market segments.

The key attributes that need to be configured in the product master for segmentation include:

• Product categories or types

• Customer segments or profiles

• Pricing tiers or levels

• Market regions or territories

• Promotional attributes

• Cost components

The key attributes that need to be configured in the customer master for segmentation include:

• Customer demographics (age, gender, location)

• Purchase history and behavior

• Customer preferences and interests

• Customer loyalty or membership status

• Pricing sensitivity or willingness to pay

• Sales channel preferences

Importance of data tables in cost calculations

Data tables play a crucial role in cost calculations in the PSP platform as they store and organize essential data for pricing and cost analysis. These tables contain information such as product costs, pricing components, discounts, and promotions, which are used in calculating the overall cost of products or services.

By utilizing data tables, businesses can ensure accurate cost calculations, make informed pricing decisions, and optimize profitability. The flexibility of data tables allows for dynamic adjustments based on different attributes or pricing levels, enabling businesses to adapt their pricing strategies to changing market conditions and customer demands.

Some of the tables commonly used include:

• Product cost tables: Contain information on the cost components of products, such as materials, labor, and overhead costs.

• Pricing component tables: Store data on pricing elements like discounts, markups, and promotions that impact the final price.

• Currency conversion tables: Provide exchange rates for converting costs and prices between different currencies.

• Customer-specific pricing tables: Capture personalized pricing agreements or discounts for individual customers.

• Market region tables: Store pricing variations based on geographical regions or market segments. By leveraging these tables effectively, businesses can perform accurate cost calculations, implement dynamic pricing strategies, and optimize their pricing decisions to achieve profitability and competitiveness.

Minimum data requirements for PSP administration

The minimum data requirements for PSP (Price Setting Package) typically include:

• Product data: Such as product codes, descriptions, costs, and pricing information.

• Customer data: Including customer IDs, names, contact details, and sales history.

• Transaction data: Sales orders, invoices, discounts, and promotions.

• Cost data: Breakdown of product costs, overhead expenses, and cost allocations.

• Currency data: Exchange rates for multi-currency transactions.

• Pricing strategy data: Pricing rules, discounts, markups, and pricing tiers.

By ensuring these minimum data requirements are met and accurately maintained in the PSP system, businesses can conduct comprehensive profitability analysis, optimize sales performance, and make informed pricing decisions to drive revenue growth.

Configuration of Pricing Levels

Pricing levels are configured by defining different tiers or categories of pricing based on product attributes, customer segments, or market conditions. Keys are set up in the process by establishing unique identifiers or codes for each pricing level to differentiate them within the system. These keys help in organizing and managing pricing structures effectively, allowing businesses to apply specific pricing strategies and rules to different levels for accurate cost calculations and pricing decisions.

Pricing levels are configured and set up in the process by following these steps:

• Define the criteria for different pricing levels based on product attributes, customer segments, or market conditions.

• Create pricing tiers or categories to categorize products or services according to their pricing characteristics.

• Assign pricing rules and strategies to each pricing level to determine how prices are calculated and adjusted.

• Establish unique identifiers or keys for each pricing level to differentiate them within the system.

• Test the pricing levels setup to ensure accurate cost calculations and pricing outcomes.

Process for setting up a new price list using PSP

To use the default pricing logic in PSP to create a price list, you can follow these steps:

• Access the Price Setting module.

• Select the option to create a new price list.

• Choose the default pricing logic option provided by PSP.

• Define the name, effective date, and currency for the new price list.

• The default pricing logic will automatically apply predefined pricing rules and calculations to generate prices based on the configured settings.

• Associate the price list with relevant products, customer segments, or pricing strategies.

• Test the price list to ensure that the default pricing logic generates accurate prices according to your business requirements.

• Activate the price list for use in pricing transactions and monitor its performance for optimization.

By leveraging the default pricing logic in PSP, businesses can quickly create price lists based on standardized pricing rules and streamline the pricing process efficiently.

PSP default pricing logics use of data tables

In PSP, a variety of tables are used by default pricing logic and they store and manage essential data for pricing calculations and strategies. The default pricing logic accesses these tables to retrieve information such as product costs, pricing components, discounts, and promotions to calculate prices automatically based on predefined rules.

By leveraging the data stored in these tables, the default pricing logic can apply consistent pricing strategies across products and customer segments, ensuring accuracy and efficiency in pricing calculations within the PSP.

PSP Installation preferences

PSP installation preferences refer to the settings and configurations that can be customized to tailor the system to specific business requirements during the installation process. These preferences typically include options such as defining dimensions, source types, currencies, and other parameters that are essential for accurate pricing calculations and cost management within the PSP.

By setting up installation preferences according to the organization's needs, you can ensure that the PSP platform aligns with operational processes and supports effective pricing strategies and profitability analysis.

Examples of PSP installation preferences include:

• Defining dimensions: Setting up parameters such as product categories, customer segments, or geographical regions to categorize and analyze data.

• Source types: Configuring different sources of data inputs, such as sales transactions, cost information, or pricing data.

• Currencies: Specifying the currencies used for pricing calculations and cost management within the PSP system.

• Default pricing rules: Establishing standard pricing rules and strategies that will be applied by default in pricing calculations.

• User access levels: Setting permissions and access rights for different users or roles within the PSP platform.

Quiz

Test your knowledge of this section, here.