Purchasing and Supply Chain Management Pricing Decision

Week 4 Assignment Pricing Decisions BUS 612-Advanced Project Procurement October 01, 2012 Pricing Decision One of the most important and complex decisions a firm has to make is how much to pay for its items and services. The buying professional should be able to detect easily exceptionally high prices. Thus, it is necessary to give meticulous consideration to pricing decision when buying products and services. Pricing is one of the most important decisions a marketer makes regarding a product since price plays a crucial role in competitiveness and consumer demand. Marketers must determine price at the initial stage of a product s life and re-evaluate pricing to manage the delicate balance between production and profits (Benton,†¦show more content†¦371). Company Using Purchasing Strategy Dell is a company that has used a purchasing strategy to improve the financial impact of the company. Historically, prices were determined through bargaining or negotiations between buyers and sellers. Different prices were set based on the buyer needs and bargaining skill. The establishment of one price for every customer is relatively new phenomenon that came about with the rise of retailers but price still remains a major factor in affecting consumer-buying decisions. The ability of price to affect consumer decision and its flexibility makes pricing strategies important in meeting Dell’s objectives in a competitive environment (Dell 10-K, 2005). The main objective of Dell is to produce the low price and profitable notebook for the customer. For Dell Company, all the prices that they sell are posed to the internet and that is usually based on the e-commerce market (eweek, 2001). The main reason for successful pricing strategy is having a reasonably precise idea of supply and demand. Dell Company has set different types of pricing based on the home user, small business user and medium or large business user. The pricing structure changes as the products move through their life cycle. Dell is the low-cost leader in the industry. Dell’s highly efficient supply chain management and manufacturing organization, efficient directShow MoreRelatedFord Implementation of Virtual Integration: A Push Pull Strategy.1587 Words   |  7 Pagesset forth goals to compete with the expansion of foreign-based auto manufacturers globally. The goal of Ford 2000 is to continue to improve quality and reduce cycle times by finding ways to improve processes involving all stakeholders within the supply chain and the company itself. The key to achieving this goal lies in the ability to take advantage of the Ford Company’s size and global presence to invest in information technology. 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