Saturday, March 8, 2008

Pricing made simple with Oracle Pricing

Today's cutthroat competition calls for flexible-pricing structure so that you could typically price the same product at a different price for every customer based on certain strategic scenarios.

Oracle Pricing engine determines the selling prices for products and services. It provides answers to the following questions:

1) Who qualifies for prices and benefits?
2) What is the item or service, which is being priced or modified?
3) How do we adjust the order price or the order line price?

How it works?

Oracle Advanced Pricing prices any transaction by first identifying a list price which contains the list price. The pricing engine (Qualifiers) then determines whether the price found on the price list have to be adjusted or not. Modifiers control the amount of these adjustments, and can modify a price by either giving a discount or adding a surcharge. Once the pricing engine has selected one or more modifiers that adjust the price, it computes the final selling price.

"Price List" contains price for items and/ or services. You could have multiple price list for the same items/service. For example: Standard Price List, Summer Promotion Price List, Festival price list

"Qualifiers" determine who is eligible for a price or modifier list. For example: Order Type, Customer Class, Customer Site and Customer Name

"Pricing Attribute" determines what is being priced or modified on a price or modifier list. For example: Item Category, Product Brand, Location, Distance, Age and Volume

"Modifiers" determines how the eligible item/service is priced. For example, Discounts, Surcharges, Coupon Issue, Item Upgrade, Terms Substitution, Freight Charge, Promotional Goods

With all the above inputs, Pricing Engine calculates the final Price which is equal to the original price on the price list minus any eligible discounts, plus any other applicable surcharges or promotions

Oracle Pricing is flexible to occupy various combinations to suit the business needs.
For example:
- Price List A is for Product X and applicable for Customer ABC.
- Price List B is for All Products and applicable for All Customer.
- Price List C is for all products belonging to Item Category A and B and applicable for All Customers

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