Introduction

This section discusses the concept of dependent price lists and using the cost-plus strategy in PSP. It covers how to create and configure price lists, as well as the importance of understanding data and pricing structure in implementing PSP.

It discusses the concept of dependent price lists in PSP, explaining how to use them in currency conversion and strategy design. It also touches on the importance of data availability and the understanding of pricing structures in companies.

Learning Objectives

Core topics and takeaways:

• Understanding dependent price lists in PSP

• Learning how to use dependent price lists for currency conversion and strategy design

• Exploring the importance of data availability in pricing strategies

• Understanding pricing structures in companies

• Learning about wildcard usage in currency exchange rates

• Exploring the Cost Plus strategy and its parameters

• Understanding how to create and prioritize strategies for data retrieval

• Learning about creating new price lists in the system

• Understanding different types of calculations and adjustments in pricing strategies

Video Highlights

Learning Highlights

• Use of currency exchange rates:

  • The system does not convert the currency if the cost data and pricing level are in the same currency.

  • The speaker mentions adding records for Euro to USD and USD to Euro conversions.

  • It is unclear if wildcards are allowed, and the speaker suggests checking the documentation.

• Cost Plus strategy

  • Global pricing level and its independence.

  • They explain that the strategy uses an adjustment engine.

  • The Cost-Plus strategy has three parameters.

  • There is another strategy that uses the same engine.

• Use of Visual Strategy Designer:

  • The list of attributes available for the strategy is shown.

  • The strategy designer is introduced as a visual tool for creating strategies.

  • The video mentions that strategies designed using this tool are the only ones available in the system

• Strategy setup and prioritization:

  • Strategies can be set up using a wizard or manually.

  • Prioritization can be used to determine the order in which strategies are applied.

  • The system can generate the necessary code for the strategies.

  • Testing of the strategies can be done before deployment.

• Price list creation:

  • The new price list can be based on the Independent price list with adjustments.

  • It is necessary to define the Independent price list before creating the new one.

  • The new price list is referred to as a "price grid" and has a unique ID.

• Calculation types and adjustments:

  • There are two types of calculations: Cost Plus and the parent or master calculation.

  • The Cost Plus calculation is duplicated for both the independent and dependent levels.

  • The final price is determined by the independent calculation and the adjustment from independent to dependent.

• PSP installation prerequisites:

  • PSP heavily relies on data for installation.

  • Understand the concept of independent and dependent price lists before installing PSP.

  • Pricing structure can be simple or complex depending on the use of independent or dependent price lists.

  • Solution architects translate the customer's business requirements into implementation decisions.

Core Learning Concepts

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

Use of Visual tool for creating new pricing strategies

The Strategy Designer in PSP is a visual tool that simplifies the creation and customization of pricing strategies. It allows users to visually design pricing rules, conditions, calculations, and discounts within the PSP platform. By using the Strategy Designer, users can easily set up and modify pricing strategies without extensive technical knowledge. This visual interface enhances user experience, streamlines the process of strategy creation, and enables quick testing and implementation of various pricing scenarios in PSP.

Setting up and prioritizing pricing strategies in PSP

Setting up and prioritizing pricing strategies in the system involves configuring parameters, assigning priorities to strategies, establishing a hierarchy for their application, testing interactions, and making adjustments to ensure pricing rules align with business objectives and are applied effectively.

Setting up and prioritizing pricing strategies provides value by:

• Optimization: It optimizes pricing decisions to maximize profitability and competitiveness.

• Efficiency: Streamlines the pricing process, saving time and resources in managing pricing strategies.

• Consistency: Ensures consistent application of pricing rules across different products or services.

• Control: Offers control over how pricing strategies are implemented and prioritized, leading to more effective pricing management.

• Adaptability: Facilitates quick adjustments to pricing strategies in response to market changes or business needs.

Overall, the value of setting up and prioritizing pricing strategies lies in enhancing pricing effectiveness, efficiency, and adaptability to drive business success.

Use of different calculations and adjustments for pricing strategies

Exploring different calculations and adjustments for pricing strategies involves:

• Calculations: Determining the mathematical formulas or algorithms used to calculate prices based on various factors such as costs, margins, discounts, and market conditions.

• Adjustments: Making modifications to pricing strategies to accommodate changes in costs, demand, competition, or other variables that may impact pricing decisions.

• Scenario Analysis: Conducting scenario analysis to assess the impact of different pricing adjustments on profitability, sales volume, and market positioning.

• Fine-tuning: Continuously fine-tuning pricing strategies by analyzing performance metrics and customer feedback to optimize pricing structures for better results.

By exploring and experimenting with different calculations and adjustments for pricing strategies, businesses can refine their pricing approaches to meet market demands, enhance competitiveness, and drive revenue growth.

Dependent vs Independent price lists in PSP

Dependent price lists are a pricing mechanism where the price of an item is determined based on the value or condition of another item. In this setup, the price of one product is dependent on the price or attributes of another related product. This can be used to create dynamic pricing structures, bundle pricing, or promotional offers where the price adjustment of one item triggers a corresponding change in the price of another item. Dependent price lists are commonly used in retail, e-commerce, and B2B pricing strategies to offer personalized pricing and incentives based on customer behavior or product relationships.

Independent price lists are standalone pricing structures where the price of each item is set independently of other products or conditions. Each product in the catalog has its own fixed price that is not influenced by the price or attributes of other items. Independent price lists are straightforward and easy to manage as changes to one product's price do not impact the pricing of other products. This pricing approach is commonly used for products with stable pricing, where individual prices are not interconnected or dependent on external factors.

Currency exchange rates in PSP

Currency exchange rates in PSP are used to convert prices from one currency to another for international transactions. By setting up and maintaining accurate exchange rates in the system, businesses can ensure that prices are displayed and calculated correctly in various currencies. This feature is particularly useful for companies operating in multiple countries or selling products globally, as it allows for seamless pricing adjustments based on real-time exchange rate fluctuations. PSP uses currency exchange rates to provide customers with accurate pricing information in their local currency, facilitating international sales and enhancing customer experience.

Currency exchange rates are maintained in PSP through the following steps:

• Manual Entry: Users can manually enter and update exchange rates within the system based on current market rates or specific business requirements.

• Automated Updates: Some PSP systems offer automated tools that fetch and update exchange rates from external sources, ensuring rates are always up-to-date.

• Scheduled Updates: Exchange rates can be scheduled to update at regular intervals to reflect changes in currency values over time.

• Historical Data: PSP systems may also store historical exchange rate data for reference and analysis purposes.

Quiz

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