Presentation on theme: "Pricing Review – SPR April 2012. Channel SPR Request Performance."— Presentation transcript:
Pricing Review – SPR April 2012
Channel SPR Request Performance
BOOK PRICE? COMPETITIVE? Many of the sales today are not willing to try the book price because they lack faith in the pricing. We also tend to feed this view by; –Giving special pricing on requests with small qty or where no competitive information was provided. –When sales ask what price is reasonable with no information from the customer on competitor etc and we dont refer them to the book price. –When we allow for discounting on our existing price structure without proper market/profit analysis. The quickest way to get them to change the perception is for YOU to believe in your pricing and for them to have some wins with the current book price level.
BOOK PRICE? COMPETITIVE? GPL 236 – ASIA POS STUDY vs OEM BOOK PRICE LEVEL –Last 12 months data line items with avg price falling in the BOOK PRICE RANGE line items with avg price falling outside of book range.
page 5 / Why Special Price Request ? when there is no book price published in the region, QTE (SAP Quote). when they need to follow OEM contract price, FAP (Follow Agreement Price). when there are solid reasons/justifications, MCP (Meet Competitive Pricing); NDR (New Design Registration) – Only for Distribution; CCR (Competitive Conversion Request) – Only for Distribution; CSS (Clear Stock Selling) – One Time Deal Coming Soon !
Types of Pricing Request and Application Requirements 1) Meet Competitive Pricing (MCP) Mandatory information to put in the request: Target price Competitive price Competitor name Competitor product name/description If the mandatory information is not provided, the request will be rejected ! 2) QTE (SAP Quote) No Standard Price is available in E-Commerce Need background information on why this PN is needed Request shall be rejected if business information is inadequate
3) New Design Registration (NDR) Applies to situations where a distributor has a direct and substantial role in identifying or creating demand for eligible TE Products The minimum value per line item is 5,000 USD The validity of a NDR is 2 years. During this period TE has the right to revoke the registration without liability to the distributor if customer could not fulfill the committed order qty. The ID number provided along with the approval of the NDR has to be inserted in the Pricing Request. If not provided, the pricing request will be rejected. 4) Competitive Conversion Request (CCR) Brand new business / Project The minimum value per line item in a CCR request is 5,000 USD The validity of a CCR is 1 year. During this period TE has the right to revoke the registration without liability to the distributor if customer could not fulfill the committed order qty. Types of Pricing Request and Application Requirements
5) FAP (Follow Agreement Price/contract price) End customer/ultimate end customer must be with TE Letter of Authorization (LOA) or approval document from the Agreement owner must present Valid only when end customer/ultimate end customer has an effective agreement price fixed with TE & meet/above the MOQ 6) CSS (Clear Stock Selling) Coming Soon !? A special price to clear stock that may become dead stock if not sold for any dollar value Normally it is at One Time Deal or within a very short offer period. Customer may place one single order for the whole lot stock. Types of Pricing Request and Application Requirements
Matrix of Request Types and Requirements – AP * NDR & CCR – for Distributor use Only
Important Notes All the above mentioned are required to comply with the followings: Valid for active TE part; correct SPR type is chosen Information put in SPR should be true and correct to the best knowledge End customer information is required on Header page in GPMS and ultimate end customer must be identified if it is a subcontractor Require accurate order qty in Annual or Project base. TE might revoke the price if customer fails to fulfill the application requirements, e.g. the committed order qty. The official valid period for a special price is 30 days in general although it might be valid with a longer period in our internal record. Special Price upon expiry will NOT be renewed automatically. Request shall be submitted again together with all updated justifications for Pricing approval. Book price will be offered if concrete reasons/justification is insufficient. No special price quotation is legitimate ONLY IF it is reviewed and approved by Pricing Team – Dont pre-commit special price to customers !