The pricing and the enterprise guidelines (12)

The pricing guidelines of an enterprise are the definitions that drive its sales price practice.

There are four hierarchical levels of enterprise pricing guidelines: at the top is the business plan, followed by marketing strategies, then pricing policies, and, lastly, pricing tactics.

Each of these levels has a predominant target. The business plan’s target is profit, the marketing strategy’s target is the client, the pricing policies’ target is the offer’s value, and the target of pricing tactics is the negotiation itself, as illustrated below.

Once the offerer concludes the first planning step—the business plan including the product line, targeted markets, human, physical, and financial resources involved, billing volumes, and profitability goals—he must establish his marketing strategies..

A client-oriented marketing strategy is an articulated course of action comprising the controllable marketing variables directed to satisfy buyers’ and consumers’ needs and desires as profitability as possible.

Generally speaking, there are two species of marketing strategy: wide-range and restricted-range.

A wide-range strategy includes all, or almost all, controllable marketing variables: product mix, distribution channels, sales force, price and other trading conditions, and advertising and sales promotion. A restricted-range strategy, in turn, deals with only a few variables or some aspects of them, such as price and promotion.

The main wide-range marketing strategies are (1) imitation, (2) differentiation, (3) diversification, (4) segmentation, (5) focus, (6) price competition, and (7) offer appreciation.

In its place, as restricted-range marketing strategies, we should mention:

1. Product and service improvement.
2. Disintermediation.
3. Ephemerality exploitation.
4. Financial impact mitigation.
5. Life cycle cost reduction.
6. Emphasis on offer externalities.
7. Sales force development.

Finally, as addressed in another post, the offerer must establish the pricing policies and tactics that complement the enterprise planning.

C. L. Eckhard, author of Pricing in Agribusiness: setting and managing prices for better sales margins.