Co-ordinating pricing decisions – how does it happen?
Top management and three functions – finance, sales and marketing – all have a part to play in pricing decisions. The extent of that involvement could range from the ability to express a view all the way to decision-making authority. The role will vary between companies and according to circumstances. In orderly and slow-changing environments, time is available for a consultative approach. In the urgent midst of a price war, single-minded decisiveness is likely to prevail.
Dolan and Simon (1996) offer three scenarios used in practice to achieve functional co-ordination.
Internal negotiation. Finance and sales determine their own views for price movements and then representatives meet to share ...
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