Sales & Marketing Management

Key components of a pricing policy

After completing the detailed research and analysis (discussed previously), you
will have reached conclusions in regard to:

Û Who your customers are

Û What the needs of your customers are

Û What product suppliers have the best product lines and programs to

help you satisfy those needs

As part of your marketing plan, you have to implement a strategy that

fits your budget and takes advantage of the support programs offered by

your suppliers.

Thirteen key areas to consider when developing a product pricing policy are:

All thirteen of these topics will affect the pricing of your offerings. Take all of
them into account so that whatever additional costs are involved, or supplier
programs that alter gross margins (GM), your business will be able to maintain
and control its profitability.

Let us discuss each of the thirteen topics in some detail.

1. Instant Customer Recognition


2. Co-operative advertising programs


3. To handle a name brand or not


4. Product mix


5. Distribution structure


6. Local competition and product
   abundance


7. Dealer program policy
   8. Product quality and selection
   9. Pricing structure and policy (of
   suppliers)
   10. Advertising programs and support-
   nationally and locally
   11. Warranty policy and guarantee
   procedure
   12. Shipping policy, freight policy and
   returns
   13. Payment terms