PRICING STRATEGY

Pricing Strategy and Decision Making In Procurement

Pricing Strategy and Decision Making In Procurement

Introduction

The price of an item is an important component of decision making in procurement as the procurement strategy as part of the Materials Management a company sets the medium term, the distribution of procurement of goods and services to individual suppliers fixed. The central aim of a procurement strategy is to ensure the supply of the company by any means necessary. These contrasts with the associated costs and the economic interest of the firm, these costs must be kept as low as possible (Stundza, 1997).

Yes, it is true this is not only the important factor for a final decision. There are several other factors which will be discussed in the discussion section in context to pricing strategy.

Discussion

The pricing strategy is to help achieve the goal of the company and oh take into account the type of product lines, competition ... and the novelty of the product; the more innovative is the product the better the pricing alternatives. The design of the pricing strategy is very important and must be taken into account in developing the following criteria:

Company Objectives

Flexibility

Market orientation

Differential Strategies

Try to exploit the heterogeneity of consumers. It sells the same product or brand at different prices depending on the characteristics of consumers; it is ultimately price discrimination.

Pricing strategy fixed or variable: A fixed price means that the product sells for the same price and under the same conditions of sale to all customers. Apply regardless of the characteristics of the consumer. The variable price, the price is negotiated for each transaction. This procedure is common when buying high-priced products, such as housing (Romano, 1994).

Quantity discounts. Nonlinear Pricing: A reduction in the unit price offered to the purchaser of a ...