PARIS Tech Shopping Website Image

PARIS Tech Shopping Website Image

(Pricing Performance Management)
PPM utilises an SKU or Product level pricing analysis and volume trade off model. The objective is to model pricing across market segments starting at the RRP (Recommended Retail Price) and working all the way down to the Direct Contribution Margin level. The model simply calculates the effect of pricing decisions at a break even volume. That is, if certain rebates, allowances or discounts are given, what volume needs to be achieved to at least break even, otherwise why give those discounts away. Brand managers are able to model the effects of pricing decisions and determine whether the proposed pricing will meet corporate objectives.