The Importance of Pricing & Price Lists for the Food Industry & Wholesalers
Price lists play a significant role in the operations of food industry companies and wholesalers.
They determine a company’s revenue and directly influence customer satisfaction and customer relationship development. In this article, we discuss the importance of price lists, price segmentation, and price hierarchies, as well as how these tools can be successfully used to grow a business.
Price Segmentation and Price Hierarchies
Price lists must cover all the needs of the company and adapt to all kinds of pricing requirements without setting limits on pricing possibilities. For example, there may be different prices between restaurants, hotels, hypermarkets, and small shops. Likewise, customers who buy in larger quantities may get the products cheaper than those who buy smaller quantities.
This segmentation allows the creation of a specific price hierarchy, where larger buyers get cheaper prices. This also encourages customers to buy more and increase the company’s revenue.
Quantity tiers are another way to encourage customers to buy larger quantities. By buying more, customers get the products cheaper. This strategy can help a company increase sales and enhance their results.
Defining the validity periods of price lists is an effective and essential tool. This allows for the creation of new price lists in advance, which automatically take effect on a specified day. This is particularly useful in planning new range periods.
Campaign Price Lists
Campaign price lists are an important part of a company’s sales strategy. They allow for an exceptional price for certain products during a campaign. After the campaign ends, the standard price list automatically comes into effect. This helps attract new customers and increase sales during the campaign.
Lowest Price or Most Accurate Price?
Each company can decide whether to follow a lowest price strategy or the most accurate price. The lowest price strategy checks all price lists valid for the customer and finds the most affordable one. The most accurate price, on the other hand, means that the system stops the price search as soon as it finds a specific price list for the customer and the product. Thus, the customer’s own price list has a higher priority than the chain’s price list.
Price List Hierarchies
Price list hierarchies are useful if one wants to customize prices for certain customers. For instance, if a certain customer buys a specific product more than other members of the same chain, they can have their own price for that particular product. Otherwise, they follow the chain’s general price list or the general price list.
The effective use of price lists, price segmentation, and price hierarchies can help food industry companies and wholesalers grow their business and facilitate daily work. These tools assist companies in attracting and retaining customers, increasing sales, and growing revenue. It’s essential that companies understand the use of these tools and take advantage of them in the best possible way.