What is Attribute-Based Pricing?
Attribute-Based Pricing is a pricing model which uses product attributes as its principal price scaler.
Pricing which derives its price based on its product categorization, quality, demand and competition and uses the concept of Value Based Pricing.
Thus, a model which uses these materialistic attributes that shall influence customer’s willingness to pay!
Attribute-based pricing model holds relevance both in Product as well as Service Based industry where product differentiation is used as basis of pricing.
Few common examples encountered by all of us to make these pricing decisions are;
- Hotel Rooms – Sea Facing, Mountain Facing
- T-Shirt Colors – Red, Black, White
- Clothes – S, L , XL, XXL
- Packaged Foods – Based on flavor
- Cakes and Cookies – Based on shape
- Food Packets – Based on weight
- OTT Platform – HotStar, HotStarPlus, HotStarPreminum
NetSuite Pricing Matrix Model
Attribute-Based Pricing is often referred as Pricing Matrix in Oracle NetSuite!
Following pointers make the Matrix Items easier to understand!
- The NetSuite matrix items are a series of the same item available in different options. Matrix items are available for inventory, non-inventory, service, and other charge items. In NetSuite, you can create and maintain your item records using an item matrix. A matrix item lets you track your items by options such as size and color.
- Enable Matrix Items in Enable Features under Setup>Enable Features>Inventory and Items>Matrix Items
- Now create new items using the Matrix Assistant/Creating Matrix Item and link the product categories with the price determined for it.
- Depending on the features enabled on your account, the Pricing sublist on many item records can resemble a matrix of rows and columns of various price lists.
Examples
Use Case 1
H&M is selling their thermal wear collection. Prices are dependent on sizes. S -200, L -250, XL – 300
Attributes:
- Grey and White Color
- Size of the product
Use Case 2
A cable TV operator wants to charge his customers based on the channels availed. Star Plus Regular Channel is priced at $25 while Star Plus HD is priced at $35
Attributes – HD and Non-HD Thus, matrix items are a boon in NetSuite pricing to set up the entire price list at one go!
Editing Matrix Items in NetSuite
You can edit 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 – Fields edited on subitems are only changed for that item. Fields edited on the parent item can be applied to all or some of the subitems.
For all the other fields, we can make suitable changes on the parent item level as follows:
To Edit Multiple Matrix Items:
- Go to Lists > Accounting > Items.
- Click Edit next to the parent matrix item for the matrix you want to change.
- Make changes to any of the fields for this matrix.
- Click Update Matrix.
- In the Include column, clear the boxes for any subitems you do not want to be updated with the new information.
- Click Submit.
Matrix Items thus making attribute-based pricing simpler and easier in managing day-to-day sales!
