Pricing schemes for a company’s products and services are determined by a pricing manager. This includes coordinating with production departments to determine the cost of production, as well as working with marketing staff to develop appropriate campaigns and promotions. Employer-specific requirements for this field vary, but a bachelor’s degree in marketing, business, or a related field can be very beneficial. A Master’s of Business Administration (MBA) degree is preferred by some employers.
The pricing manager evaluates new products and services as companies prepare to launch them in order to establish pricing policies. These prices include the base price as well as any discounts offered to specific retail partners and dealers. Wireless phone companies, for example, frequently offer discounts on handsets when purchased with a phone plan. To appeal to customers, the pricing manager must decide on appropriate plan pricing as well as the level of discount to offer on individual phones.
Pricing managers take into account the total cost of production, which includes not only the actual manufacturing but also marketing, shipping, handling, and other related costs. Unless a product is specifically designated as a loss leader, they want to make sure the pricing helps the company break even and, ideally, earn a profit. Such items are sold at a loss in order to increase profits by appealing to customers, encouraging people to buy accessories, or fostering brand loyalty.
In order to stay competitive, this also necessitates considering the going rates for similar products in the industry. Customers may preferentially buy the less expensive car, for example, if two car companies offering similar vehicles have wildly different pricing. The pricing manager may also consider the company’s pricing message and how promotional campaigns will be handled by the marketing department. Small price changes can make a big difference for customers; for example, setting the price at $19.99 instead of $20.99 can make a big difference.
Attending conferences, product launches, and other events may be required as part of the job. A pricing manager must keep up with the competition, which may require some field research; for example, someone in charge of pricing at a supermarket may go to a nearby competitor’s store to check prices. Marketing and public relations skills, as well as familiarity with the industry as a whole and an employer’s specific product and service lineup, are also important.