An in-depth explainer about how to intelligently accelerate and streamline price management of global and country price lists.
Global and Country Price Lists Require More Intelligent and Efficient Price Management
For most global companies, the management of global and country price lists is anything but efficient. The process of setting, managing, and updating global and country price lists is often time-consuming and error-riddled due to an overreliance on cumbersome manual processes and spreadsheets.
Making matters worse, these manual processes are insufficient, and ultimately too slow, to keep up with the velocity of price changes facing businesses due to market volatility, inflationary pressures, supply chain disruption, and a fiercely competitive landscape. The ability to respond to these pricing challenges with speed and precision is critical. Waiting too long to enact a price change can negatively impact your bottom line and lead to lost margin.
Before we dive into the main challenges of managing these prices manually, let’s start with a refresher on global and country price lists.
What is a Global List Price?
A global list price is a reference that is used to differentiate prices. List prices are a great way of defining what the maximum price is in the global marketplace. B2C businesses will often have list prices that will represent the highest price before it is discounted. In a B2B context, there may be a list price provided by a manufacturer or distributor, or a list price from a manufacturer may be considered a reference that can be discounted.
What is a Country List Price?
A country list price is the global list price expressed in the country’s currency or other country-specific factors. Country pricing managers also have the option of applying country adjustment factors to the products they sell in their country, to ultimately arrive at the country price. Country prices are then used as the reference point for in-country matrix prices, negotiated prices or customer-specific prices.
What are the Price Management Challenges for Global and Country Price Lists?
A global pricing manager manages the full set of global list prices. This means establishing the list prices and managing the exchange rate conversions, which results in the country list prices that are used by the country pricing managers to determine further discounts.
While this sounds straightforward, when done using manual processes, it can be time-consuming and inadequate to respond to cost changes driven by today’s volatile landscape. Here is an example of the steps involved in manually managed global and country price lists, and how this approach slows this process down:
- Manually aggregating cost and other reference data: Manually aggregating massive amounts of data does nothing but take time and manpower away from more important tasks. The point of data aggregation is to gain immediate insight into how costs are changing and understand how prices will need to change as a result. Spending hours bringing data into an unwieldy spreadsheet is the first roadblock to quickly updating global and country price lists.
- Emailing price lists: Delivering the price lists to country pricing managers shouldn’t involve attaching a spreadsheet to an email and hitting “send.” Additionally, after emailing out the price lists, you must wait for feedback and then incorporate any feedback into the spreadsheet before moving on to the next step. Each point of feedback and manual adjustment within a spreadsheet introduces a new opportunity for error.
- Manual updates for currency exchange and other country-specific adjustments: When it comes to transitioning the global price list down the price waterfall to a country price list, making price adjustments based on country-specific pricing factors is of utmost importance. Manually making numerous adjustments like currency conversion or adding in country multipliers or other country-specific fees leaves the door open for human error and miscalculations. Leveraging the power of pricing software to streamline these adjustments is the only way to ensure error-free price lists.
- Wait on technical resources to update the pricing system of record with new list prices: A pricing system of record is another way of describing a company’s “pricing engine.” It is the foundational structure that holds all price records and logic and is used to calculate and deliver prices out to various commercial systems.
With a manual approach, a global or country pricing manager would have to wait on a member of their tech or IT team to update the pricing system of record with the new price list. However, pricing software can dynamically update prices and deliver them seamlessly into a company’s pricing engines.