Tip Sheets

Scan the code to learn about PROS Enterprise AI for Industrial Manufacturers I n the fiercely competitive landscape of the manufacturing industry, maintaining competitive market pricing isn't just a strategy – it's the lifeline that determines whether a business thrives or merely survives. A huge component in figuring out competitive pricing is understanding market conditions. For example, in the manufacturing industry, it's difficult to keep up with the fluctuating prices of raw materials and anticipate future market conditions. That's because—as manufacturers know all too well—the commodities they use to produce their products (such as metal, cables, wires, resin, etc.) constantly fluctuate due to changes in supply and demand in the market. Therefore, it's key for manufacturers to understand and stay ahead of these constantly changing costs to ensure they're able to compete in the marketplace and to achieve profit and margin goals. The Pricing Problem For decades, manufacturers have relied on cost plus pricing as their method of determining prices for the products they produce. This method involves the calculation of production costs, coupled with the desired profit margin you hope to receive for your product. Using this method as your pricing strategy requires very little market research and doesn't account for changing consumer demands or the end user's willingness to pay. Furthermore, manufacturers must consider other factors, such as commodity pricing when determining their MSRP. This means they take the steel, aluminum, or resin index, for example, and incorporate these prices into their bill of materials (BOM). In other words, they set their price based on what commodities are needed to build the final product. However, due to the degree of volatility in the commodities market and because they are so tied to these indices, it's extremely difficult for manufacturers to set their prices. What does that mean? They need price list management in order to keep up with the indices and change their pricing in a quicker and more efficient manner. Price to Win: The Manufacturer's Guide to AI-Driven Pricing Strategies They need price list management in order to keep up with the indices and change their pricing in a quicker and more efficient manner. PRO TIP

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