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MREV FOURNISSEURSDYNAMIQUE DES MARCHES AMONTS ET PORTEFEUILLE

ACHATS

GENIS N.

LEVY M.

BRILLET DE CANDE T.

SEROL A.

LAHLOU A.

DAUVIN N.

Groupe 14 – Management des Achats

Le 04/10/11

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INTRODUCTION « In the classic economic supply and demand model, prices are largely driven by competition »

Purchasing and Supply Chain Management,MONCZKA, Chapter X

To what extent MONCZKA recommendations would be applicable?

Does this recommendation cope with any market situation?

What are the limitations of this approach?

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SUMMARY Introduction

1- Different criterias to set up prices a) Determining factors b) Influencing factors

2- Comparison with some market situationsa) Market situation validating

MONCZKA approachb) Market situations challenging

MONCZKA approach

Conclusion Bibliography

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1- MONCZKA THEORY ANALYSIS

a) Determining factorsType of fixing price to apply: cost based or market drivenCost basedPrice is whether:

Deduced:• Total cost of the product + Margin wanted = price

Induced:• Target price – fixed margin = Allowable cost of

the product.• ROI the company wants in order to compensate

investmentsBUTDetermining factors are not exhaustive. They don’t take into account external factors.

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1- MONCZKA THEORY ANALYSIS

a) Determining factors

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Supply &

Demand

Suppliers- N° suppliers- Integration

ClientMarke

t driven

Competition

- Big- Monopoly

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1- MONCZKA THEORY ANALYSIS

b) Influencing factors

Upstream market

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Price

Economic

conditions

Market structur

e

Suppliers

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1- MONCZKA THEORY ANALYSIS

b) Influencing factors

Downstream market

Characteristics of the offer Product life-cycle Client loyalty Nature of the strategy : long-term or short-

term ? Understanding the targeted client

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2- COMPARISON WITH SOME MARKET SITUATIONS

a) Example validating MONCZKA technique

The Car industry

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Cost based Market driven

Price Volume RenaultPeugeotJapanese cars

Differentiation Bugatti, Rolls Royce

Target pricing Dacia LoganTata Nano

Market skimming

Audi, Hybrid cars: Prius

Rate of return Formula 1 => luxury cars => normal cars(Mercedez, Renault, Audi)

Promotional pricing

Prime à la casseAnniversaryEnd of a serieLottery

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2- COMPARISON WITH SOME MARKET SITUATIONS

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b) Example challenging MONCZKA theory

Geographical discount Price of related products Psychological price Yield Management Auction type pricing Complementary goods Seasonal discount

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CONCLUSION

Determining factors are valid and relevant

BUT they are not exhaustive

Fixing prices is a difficult art

MONCZKA can help fixing prices of most situations nevertheless his approach could be more complete

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BIBLIOGRAPHY Robert M. Monczka (2009), « Purchasing &

supply chain management », 4th edition, chapitre X, p.251 – 269

Arjan J. van Weele (2010), « Purchasing & supply chain management », 5th edition, chapitre XV, p.346 – 354

Targuzo.com, Stratégie de fixation des prix,http://www.targuzo.com/decision-marketing/strategie-fixation-prix.html

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