1. Using Revenue Management
  2. Pricing Dimensions

Pricing Dimensions

Organizations use pricing dimensions to categorize their goods or services for the purpose of pricing.

Each good or service has a specific pricing model, applied consistently to all sales of that good or service. The goods or services are categorized by different dimensions for the purpose of pricing, such as the amount sold or the total value of the transaction.

You can, for instance, categorize transactions based on:

  • Country

  • Customer type

  • Quantity sold

  • Total deal value

The price of the same good or service varies based on the category. Categorization parameters aren't fixed. They vary from organization to organization, and within an organization, they vary from good to good or service to service.

For the purposes of standalone selling price analysis (either calculated standalone selling price or estimated selling price), pricing consistency is checked within each pricing dimension value. Therefore, the standalone selling price for a good or service also needs to be established separately for each pricing dimension value.

Pricing Dimension Structure

Pricing dimensions are implemented using the key flexfield infrastructure. You can define multiple structure definitions for the Pricing Dimension key flexfield. Pricing dimensions are captured as segments in the pricing dimension structure.

Pricing dimension structures:

  • Can have up to 30 segments

  • Are assigned to a standalone selling price profile

  • Can vary from item to item

Each segment of the key flexfield represents a pricing dimension.

Standalone Selling Prices

Standalone selling prices for a good or service are calculated for each combination of segment values of the pricing dimension structure. For example, if a pricing dimension structure assigned to the good or service has three segments and each segment has five values, then the good or service can have up to 125 standalone selling prices.

Values for pricing dimensions can be individual values or a range of values. For example, a pricing dimension named Country will have individual values such as:

  • United States

  • Canada

  • France

  • Germany

A pricing dimension named Quantity Sold will typically have different value ranges, such as:

  • 0 to 100

  • 101 to 500

  • 501 to 1000

Each range is a value for the segment. Pricing dimension structures support both individual values and ranges of values to determine the standalone selling price. Pricing dimensions flexfield segments with either individual values or a range of values use a value set of type Independent. In the second case, each range is defined as a value in the value set, and the range details are stored separately as pricing dimension bands.

Assign Pricing Dimension Values

When you run the Identify Customer Contracts process, it extracts source data from the source applications, then automatically runs the Assign Pricing Dimension subprocess. This subprocess analyzes source data and assigns values for the pricing dimensions.

Based on the item in the transaction line, the pricing dimension structure is derived from the standalone selling price profile. The pricing dimension values are analyzed and attached to this line.

Pricing dimension value assignments are based on the user defined attribute mapping. The assignment of values is required for each applicable segment of the pricing dimension structure for every transaction line. If a value for a segment isn't available, then a default value, if defined, is assigned.

For pricing dimensions that are of type Range, Revenue Management reads the detail value provided and assigns the applicable parent value to the pricing dimension.

You can review and update the pricing dimension values assigned by the Assign Pricing Dimension subprocess.