A multi-dimensional new-market pricing paradigm
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Copyright 2017 Inderscience Enterprises Ltd. This study explores pricing methodologies, economic theories and various frameworks that influence the price-setting in different dynamic markets, while considering ways to minimise price discounting at a transactional level. Upper management in a small industrial supply firm, Shannon Hardware, recently discovered large losses in sales revenue due to price discounting at the transactional level from sales personnel due to the ever-changing dynamic markets they serve. This has made the company to look for a new price structure for their locations. A new pricing paradigm is created using a three-phase pricing methodology: 1) analyse pricing variables, economic theories and market conditions; 2) create and optimise the pricing paradigm; 3) execute the pricing paradigm and simulate what if scenarios. Once the pricing paradigm is implemented into Shannon Hardwares ERP system, the anticipated companywide benefit is to recapture an average of 7% in sales revenue per month for an increase of $140,000 dollars annually.
