Pricefx Software Configuration Tips for Each Industry

Here at Pricefx, as the leading enterprise-grade pricing software vendor, we pride ourselves on the wide business and industry applications of our pricing software solutions. This adaptability, along with extensive industry-specific guided support, (notably within the discrete manufacturing, distribution, and process manufacturing sectors), work together to support the simplified buying process and quick time-to-value modern businesses require.

With that in mind, you’ll need to understand how our software reflects this in practice, and your company’s unique configuration needs are a core part of that conversation. Is software configuration to industry needs possible with Pricefx?

In this article, we’ll offer up a few examples of how businesses in the discrete manufacturing, distribution, and process manufacturing industries can configure Pricefx tools to directly address their goals. In doing so, your company will gain a deeper understanding of the tangible benefits Pricefx solutions can bring to alleviate its unique pain points.

Configuring Pricefx by Industry: Discrete Manufacturing, Distribution, and Process Manufacturing

Pricefx, while business-agnostic, does offer companies in the discrete manufacturing, distribution, and process manufacturing industries a few tailored pricing capabilities that allow for extensive configuration, reflecting the factors most relevant to each industry’s specific needs and challenges.

However, before beginning, please note that the examples outlined in this article are opportunities for configuration, rather than customization. As these two concepts are often confused for one another, we suggest checking out our earlier article on how they’re different:

So, to jump right in, here are some key examples of how Pricefx solutions can be configured to address the unique challenges faced by these industries.

1.    Discrete Manufacturing Industry

When designing go-to-market price points for new or existing products, discrete manufacturers have a number of pricing levers at their fingertips. These can include product uniqueness and innovation, differentiation from alternatives, quality and durability, environmental sustainability, and more – all amounting to many opportunities to seize customers’ willingness to pay.

Highlighting product attributes – qualities like size, material, or energy efficiency – is one way that manufacturers design their price offerings to communicate how their products stand out from each other and from those of their competitors.

However, aligning a product’s pricing to reflect its unique attributes is often challenging, as those attributes exist in several combinations within and across product lines. These are intricacies that are difficult to capture in a rigid price ladder, which is where pricing software configuration helps.

Configuration Opportunity: Attribute/Value-Based Pricing

With Pricefx’s value-based pricing strategy available with the   manufacturers can configure their price list calculations to capture the diversity of their products through their distinct attributes.

This level of configurability ensures that a manufacturer’s pricing is tailored to accurately reflect the value these different attributes represent to their customers. By doing so, they can justify their price differentials and reinforce the value of their products.

How Attribute/Value-Based Pricing Helps Discrete Manufacturers

Pricefx offers companies the ability to easily configure their value-based pricing strategies alongside other more common strategies to build a complex pricing structure that makes sense in the competitive landscape while maximising potential profits.

For example, an electronics manufacturer offering a range of budget-friendly to high-end laptops might integrate relevant attributes like processing power, storage capacity, and other features into their price list calculations.

This ability to fine-tune pricing through attribute-based configuration doesn’t only lend itself to improved profit margins. It also mitigates the possibility that customers will be incentivized towards a hidden deal elsewhere in your portfolio that accidentally offers better value for the price, in turn undercutting your profits. Each price will reflect the value customers can expect to receive.

2.    Distribution Industry

With a large global footprint, distributors face several challenges in pricing accurately, including managing currency fluctuations, global price variances, and addressing grey market risk. Additionally, as distributors of products, not product manufacturers, there is the added difficulty of distinguishing value propositions from those of their peers to stay competitive.

Faced with these diverse challenges, distributors are tasked with developing pricing strategies that can effectively address each, and this is where having flexibility in the configurability of pricing tools proves to be valuable.

Configuration Opportunity: Costing Workbench

is a costing workbench, which distributors can use to calculate and forecast the cost of acquiring and serving products, encompassing all cost facets of a product from purchase to sale.

A costing workbench can be easily configured to a distributor’s unique costing process. This means that a distribution company can configure a custom price calculation grid to accurately account for variable cost-to-serve elements like warehousing, transportation, and packaging costs – factors that are likely to erode bottom line margins if left unaccounted for in pricing.

How Costing Workbenches Help Distributors

When using this tool, distributors have complete control over the level of granularity they need in their pricing structure, ensuring that their pricing fairly reflects the cost involved in getting products from manufacturers to resellers and consumers.

This capability can make all the difference for global distribution companies that struggle with inconsistent margins caused by varied cost-to-serve elements across different product lines and markets.

Pricefx’s costing workbench gives distributors the opportunity to configure more precise cost models that account for those cost intricacies, and by doing that, they can execute a more consistent pricing strategy that improves profit margins.

Configuration Opportunity: Geographical Price Lists

In addition, distributors can configure Pricefx price lists based on the distinct factors influencing price across regions, such as a market’s willingness to pay, demand levels for specific product lines, currency, and its general economic strength globally.

For example, the willingness to pay for premium consumer electronics is generally higher in the US compared to somewhere like Southeast Asia due to differences in economic conditions and corporate cultures. In a similar vein, the need for specific products in metropolitan areas will significantly differ from that of more rural regions –

Geographic price lists not only ensure a profitable price for each region, but also serve as a defense against grey market risk (the less-than-desirable access to the same product at lower-prices from alternate markets) by aligning pricing and demand appropriately across regions.

How Geographical Price Lists Help Distributors

Due to the global nature of the distribution industry, the ability to make geographical distinctions in price lists across a myriad of factors helps distributors accurately reflect region-based complexities that more rigid tools can’t capture.

Additionally, without the ability to capitalize on distinguishing factors like unique product offerings, the flexibility to configure price lists to consider geographical differences allows distributors to tailor their pricing structures to meet the specific needs of the markets they serve, and in turn, safeguard their competitiveness on a global scale.

3.     Process Manufacturing

As sellers of highly commoditized goods, such as petrochemicals or refined oils, process manufacturers face a unique set of obstacles to profitable price setting in their industry. Some of these challenges include differentiating near-identical products from competitors and navigating market pressures like supply chain disruptions and raw material cost fluctuations.

As they face commoditization and external volatilities, process manufacturing companies require ways to configure their pricing to accurately capture the few factors available to them.

Configuration Opportunity: Index-Based Pricing

Many opportunities to price profitably, such as product value differentiation, aren’t available to process manufacturers. In other words, oil is oil. Quite often, the product doesn’t change much between suppliers; instead, its price is determined globally through market forces and geopolitical factors, not by the suppliers themselves.

With this limited control over their pricing, process manufacturers largely rely on global price indices for raw materials, such as crude oil and natural gas, to dictate their pricing. Here is where being able to configure index-priced pricing is valuable.

Much like how other industries scrape competitive data to inform their pricing, a third party can source market indices on the behalf of process manufacturers and integrate them into the pricing process.

Pricefx offers discrete manufacturers the ability to configure their price grids to calculate prices based on market indices for raw materials and commodities, enabling them to accurately set market-rate prices for their products and provide accurate spot deals to customers.

How Index-Based Pricing Helps Process Manufacturers

First, configuring price grids to consider market indices in calculations allows process manufacturers to quickly set prices in line with the market. For example, crude oil prices are decisive in industries like petrochemical and energy, and the ability to track and incorporate them into pricing strategies allows for more accurate and up-to-date pricing.

Additionally, by integrating market price trend analytics into the pricing process, process manufacturers can better forecast the value of yet-to-be-extracted products, which enables them to make strategic decisions around the most profitable timing for extraction.

Beyond Configuration, How Can Pricefx Support Your Industry?

Apart from those already mentioned in this article, Pricefx capabilities can be tailored to address any of your industry’s unique problems, be it through  or by choosing a use case from our industry catalogues. What’s more, if your business engages in activities found in multiple catalogues, rest assured, we can offer configurations to suit your unique needs.

Note that our industry experts, who serve as the guardians of our catalogues, are veterans in the industries mentioned. Not only are they available to guide you with their expertise prior to your company deciding, but they’ll also provide ongoing support during implementation to ensure that your company’s unique goals are effectively addressed.

For further reading on how Pricefx can help your specific industry, we suggest heading over to our articles on how Pricefx helps with each so your business can make an informed decision:

• How Pricefx Helps for Discrete Manufacturing
• How Pricefx Helps for Distribution
• How Pricefx Helps for Process Manufacturing

Or, if you would like an in-depth overview of the pricing strategies available to your business and how they address industry-specific challenges, check out our comprehensive guide below: