What is Attribute-Driven Pricing?
Attribute-Driven Pricing refers to a pricing strategy that utilizes product attributes as the key determinants for setting prices. This pricing model assesses factors such as product categorization, quality, demand, and market competition while leveraging the concept of Value-Based Pricing. Essentially, this approach harnesses physical attributes that impact a customer’s willingness to pay. The attribute-driven pricing model is relevant across both the product and Service industries, where product differentiation forms the basis for pricing decisions. Common scenarios that exemplify these pricing choices include:
- Hotel Rooms – Sea View, Mountain View
- T-Shirt Colors – Red, Black, White
- Apparel – S, L, XL, XXL
- Packaged Foods – Based on flavor
- Cakes and Cookies – Based on shape
- Food Packages – Based on weight
- OTT Platforms – HotStar, HotStarPlus, HotStarPremium
NetSuite Pricing Matrix Model
The Attribute-Driven Pricing strategy is often referred to as the Pricing Matrix in Oracle NetSuite! The following points clarify the Matrix Items concept:
- NetSuite matrix items represent a collection of the same item available in various specifications. These matrix items can be found in inventory, non-inventory, service, and other charge items. In NetSuite, you can establish and manage your item records through an item matrix. It allows you to monitor your items based on options such as size and color.
- Activate Matrix Items in Enable Features via Setup > Enable Features > Inventory and Items > Matrix Items.
- Next, create new items using the Matrix Assistant or by Creating Matrix Item and connect the product categories with their respective prices.
- Depending on your account settings, the Pricing sublist for various item records can appear as a matrix made up of rows and columns for different price lists.
Examples
Use Case 1
H&M offers a collection of thermal wear, with prices varying by size: S – $ 200, L – $ 250, XL – $ 300.
Attributes:
- Color Options: Grey and White
- Size Variance
Use Case 2
A cable TV provider charges customers based on the channels selected. Star Plus Regular Channel costs $25, while Star Plus HD costs $35.
Attributes:
- HD and Non-HD
Consequently, matrix items simplify pricing structures in NetSuite, making it efficient to establish an entire price list at once!
Editing Matrix Items in NetSuite
You can modify the following fields on matrix subitems:
- Item Name/Number
- Display Name/Code
- Vendor Name/Code
- Purchase Description
- Sales Description
- Shipping Cost
- Handling Cost
- Item Weight
- Purchase Price
- Sales Price
- Reorder Point
Note: Changes made to fields on subitems only affect that specific item. Modifications on the parent item can apply to all or specific subitems.
To Edit Multiple Matrix Items:
- Navigate to Lists > Accounting > Items.
- Click Edit next to the parent matrix item you wish to alter.
- Modify any desired fields for this matrix item.
- Click Update Matrix.
- In the Include column, deselect any boxes for subitems you do not wish to update with new information.
- Click Submit.
Matrix Items thus streamline the process of implementing attribute-driven pricing, simplifying the management of everyday sales!
