When major decisions on pricing policy are required, both the chief marketing executive and the sales executive occupy influential positions in top management councils. Relative, to other executives, they generally have much clearer ideas of the prices final buyers are willing to pay, the sales executive, because of close and continuing contacts with the market and the marketing executive because of access to pricing information gathered and interpreted by the marketing research staff.
In spite of the fact that these two executives are well qualified to speak with authority on pricing matters, price policies should be formulated and prices should be set by a group of executives. Each department affected should be represented, for pricing policy making is, by nature, an interdepartmental activity.
Include in the policy making group should be representative not only of the marketing department but also of such departments as production, cost accounting, credit, advertising, legal, and public relations. Pricing policies should result from the cooperative action of the group rather than from compromises among its members.
Once pricing policy is established, its implementation is the responsibility of the sales executive. For example, the pricing committee might adopt suggested list prices, but the sales executive is the one responsible for information distributors and dealers and obtaining their conformance. Responsibility for administering prices should be assigned to the sales executive, because the sales department has the closest relationship with the market.
Get Daily Marketing Updates in your Inbox