Target pricing method
14 Assignments
0 Petitions
Accused Products
Abstract
A method and process of target pricing a value, such as a bid, or other price which includes the steps of pricing the value using stored list prices in a product model, costing the value using stored costs in the product model, calculating. an equivalent competitor net price for the value using a competitor net price model, calculating. the probability of winning the value as a function of price using parameters from a market response model, and calculating a target price for the value. The preferred target price maximizes expected contribution using an optimization model that determines competitive response to any potential value, or bid. The method and process further preferably include the steps of calculating one or more benefits of target pricing in comparison to a pre-existing pricing approach, determining a target range for the target price to be within, and determining strategic objects that constrain the target price of the value or bid.
85 Citations
49 Claims
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1-34. -34. (canceled)
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35. A computer-readable medium comprising computer executable instructions for executing a method for determining a target price for an auction item, the method comprising the steps of:
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pricing the auction item using list price data in an electronically stored product model;
costing the auction item using cost data in the product model;
determining an equivalent competitor net price for the auction item using an electronically stored competitor net price model;
processing of said auction item pricing, said auction item costing, and said equivalent competitor net price to calculate a plurality of bids as a function of prices using the parameters from an electronically stored market response model that calculates winning probabilities for each of the prices; and
processing of said optimal bids to calculate a target price for the auction item, wherein the processing of said optimal bids comprises accessing an electronically stored optimization model that calculates a separate expected contribution value for each of the bids and selecting an optimal bid associated with a maximum expected contribution, wherein the expected contribution for a selected bid comprises a product of a marginal contribution for the selected bid and the winning probability for the selected bid, wherein the marginal contribution comprises revenues from winning the auction item at the selected bid minus immediately incurred costs from winning the auction item at the selected bid. - View Dependent Claims (36, 37, 38, 39, 48)
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40. A computer-readable medium comprising computer executable instructions for executing a process of method for target pricing an auction item, the process comprising the steps of:
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pricing the auction item using stored list prices in an electronically stored product model;
costing the auction item using stored costs in the product model;
determining an equivalent competitor net price for the auction item using an electronically stored competitor net price model;
processing of said auction item pricing, said auction item costing, and said equivalent competitor net price to calculate a probability of winning the auction item as a function of price using parameters from an electronically stored market response model; and
processing of said probability of wing to calculate a target price for the auction item that maximizes an expected contribution value using an electronically stored optimization model that determines competitive response to any potential price for the auction item, wherein the expected contribution the target price comprises a product of a marginal contribution for the target price and the winning probability for the target price, wherein the marginal contribution the target price comprises revenues from winning the auction item at the target price minus immediately incurred costs from winning the auction item at the target price. - View Dependent Claims (41, 42, 43, 44, 45, 46, 47, 49)
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Specification