Title: A multi-dimensional new-market pricing paradigm

Authors: Jeremy Tucker; Malini Natarajarathinam; Sai Balagi Thalanayar Swaminathan

Addresses: Department of Engineering Technology and Industrial Distribution, Texas A&M University, 3367, College Station, Texas 77843, USA ' Department of Engineering Technology and Industrial Distribution, Texas A&M University, 3367, College Station, Texas 77843, USA ' Department of Engineering Technology and Industrial Distribution, Texas A&M University, 3367, College Station, Texas 77843, USA

Abstract: 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 Hardware's 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.

Keywords: market pricing; strategic pricing; price method; price discounting; price optimisation.

DOI: 10.1504/IJBPSCM.2017.089044

International Journal of Business Performance and Supply Chain Modelling, 2017 Vol.9 No.3, pp.215 - 237

Accepted: 02 May 2017
Published online: 04 Jan 2018 *

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