Thursday, January 02, 2014

Baseline Conceptual Models: Product Offering and Pricing Model

Product Offering & Pricing Model:  Products must be offered with a price to be sold.  This model depends on the Product Specification Model.  

Product Offering:  A product Offering represented by SKU or UPC.  A product can be assigned many product offerings (SKUs) in order to market the product to different demographics and regions. The reasons are that a packaged product may be packed with English, Spanish, and French instructions.  The package may also be packaged with a wall outlet that is compatible for Canada and America only.   So this product should only be marketed to USA and Canada.   You might find that a product may be offered to only a specific demographic as well.  The product may be packaged with a Student or School type packaging and product keys offered at a specialized price.

Benefit Quantity Offer:  A product offering can also specify the quantity of the benefits offered for a product.  This enables the ability to adjust Benefits Quantities per product offering.  These types of benefits require a cloud service to manage and enforce.

Product Offer Price: A product offering can be assigned one or more prices over a period of time through promotions of the product. 

Additional Promotional Benefit Quantity Offer:  A product offering could be promoted with a additional benefits specific to that offer.  These types of benefits require a cloud service to manage and enforce.

Promotion:  Promotions can span over one or more product offerings.  
  • Product Specific Promotions are used to target specific products to a market.  
    • Standard Pricing Promotions are the standard daily price for a product offering. 
    • Sales Promotions are discounted pricing for a limited time.
    • Coupons are special discounts that customers can apply at the time of purchase and are valid for a limited time.
    • Targeted promotions offered discounts to a specific customer account.
  • Non-Product Specific Promotions are used in general across board of a sales.  Example: 50% off all products. 
  • Special Pricing Agreements are specifically created with one or more promotions that are applied to a company for certain products discounts.    
Product Bundling:  Products can be bundled post manufacturing as a form of promotion or fire sale.

SKU (Stock Keeping Unit):  The is used to track a product in inventory.   But as time has passed and the commerce has become a much more complex environment this term has been extended and many times abused.   I would classify SKUs as a sales and marketing concept in which many SKU's can be created for a product depending on the market demographic it is targeted for.

Note 1:  You will notice that the Benefit Quantity Offer Entity has a suggested Primary Key of Product ID, Offer ID, Digital Benefit Specification ID in which Product ID is BOLD.   Product ID is an example of key folding in which the Product ID from Product folds into Product ID from the Product Offer Entity.  I personally like to call this a data harmonic.  Hope that helps you understanding some advanced modeling techniques that are demonstrated in this model.

Note 2:  Please apply same logic to Additional Promotional Benefit Quantity Offer as you see applied in Note 1.

Please see (Baseline Conceptual Models Commentary) for further details on what conceptual models are to be used for.     

No comments: