Blog, Pricing

Process Manufacturers and Distributors Gain More Dynamic Pricing Capabilities in Vendavo® PricePoint

By Karl Larsson
October 27, 2020

For 20 years, large process manufacturing and automotive companies have relied on Vendavo PricePoint for end-to-end operational pricing support including the introduction of new list prices, price revisions, and managing the customer commercial conditions. Today, the popular solution has been extended to deliver enhanced dynamic pricing functionality as B2B companies shift to meet their customers’ preferences for digital commerce instances.

The time for distributors and process manufacturers to provide improved customer experiences with the right product at the right price at the right time is now. So is the goal to grow profitability. This is the very definition of commercial excellence and how Vendavo solutions help.

Here’s a look at what’s new in Vendavo PricePoint.  

Formula-Based Pricing 

Support for the process manufacturing industry has been enhanced with formula pricing capabilities. Formula pricing is an arrangement where a buyer and seller agree in advance on the price to be paid for a product delivered in the future, based upon a pre-determined calculation. ​The operational pricing support PricePoint gives to this process includes: 

  • Management of externally-indexed information such as third-party commodity or market reference data.
  • Support for formula libraries which can be validated from a central perspective and pre-approved for usage, including pre-approved variable ranges for efficient operational and risk management.
  • Formula pricing by customer has been added to the standard Deal Management capabilities including customer negotiated components. 
  • Continuous recalculations and updates of the agreed price according to the agreed frequency which are then sent to the ERP. 

 Multi-Target List Pricing 

  • Manage parallel price lists on the same organizational level using different price rule scenarios to allow for better operational support for concepts such as gold, silver and bronze price lists. 
  • In Tier Pricing, the same scenario priority can be used but with different input parameters per pricing tier. This is useful when a distributor wants to pass through the price difference, per quantity tier, to the end customer. This is especially valuable when used with a business logic to control the quantity breaks per pricing tier.
  • Additional support for more advanced pricing strategies that include the possibility to use more incoming price types / pricing methods for each product.

Dynamic Pricing and Re-Pricing 

  • Price recalculation performance is key. Rule-based dynamic pricing is enabled for all the multi target price lists. 
  • Transactional sales data percentiles are enabled for both reporting, guidance and price drivers in the price rules. This enables the user to see and use up to five different percentiles for all legal entity / product combinations. 

Customer Price List Allocation 

  • When parallel price lists are used, PricePoint supports the user assign a customer to the correct price list (i.e. Gold / Silver / Bronze price list) and manage exceptions at the product or product group level. 
  • This capability can be used in combination with invoice discounts, promotional pricing, and off invoice rebate scenarios for a full end-to-end operational pricing support. 

Claiming Your Commercial Edge 

Dynamic pricing and multi-target pricing approaches are already being used by several Vendavo PricePoint customers in their daily pricing activities. Even though these enhancements are targeted towards specific industry verticals, the capabilities are available for all Vendavo PricePoint customers and can be used wherever they make sense.

To learn more about PricePoint, join the webinar, New Commercial Capabilities for Vendavo PricePoint.