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Siemens

Siemens uses various pricing models in business-to-business markets including: 1. Cost-plus pricing to calculate costs and add a markup for profit. 2. Value-based pricing to set prices based on the value products provide customers. 3. Volume discount pricing to reward large volume customers with discounts. Siemens may also use dynamic pricing and tailor pricing strategies to different customer segments. In emerging markets like China, India, and Brazil, Siemens adopts competitive pricing to penetrate the market while offering quality, affordable products made locally.

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300 views2 pages

Siemens

Siemens uses various pricing models in business-to-business markets including: 1. Cost-plus pricing to calculate costs and add a markup for profit. 2. Value-based pricing to set prices based on the value products provide customers. 3. Volume discount pricing to reward large volume customers with discounts. Siemens may also use dynamic pricing and tailor pricing strategies to different customer segments. In emerging markets like China, India, and Brazil, Siemens adopts competitive pricing to penetrate the market while offering quality, affordable products made locally.

Uploaded by

Asmita Kadam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Siemens, like most companies, prices its products based on a variety of factors such as

production costs, market demand, competition, and distribution channels. The


company also considers its target customers and the added value of its products when
setting prices. Additionally, Siemens may offer discounts or promotions, or vary
prices based on geographic location. The company also considers factors such as
exchange rates and tariffs when pricing products for international markets. The exact
pricing strategy of Siemens can vary from product to product and market to market,
and can change over time.
In B2B (business-to-business) markets, Siemens uses a variety of pricing models to
sell its products and solutions. Some of the common pricing models used by Siemens
in B2B markets are:

Sure, I can provide more details using Siemens as an example:

1. Cost-plus pricing: In this model, Siemens calculates the cost of producing a


product, including materials, labour, and overhead expenses. Then, it adds a
markup, which represents the profit margin, to arrive at the final selling price.
For example, Siemens may use cost-plus pricing for its low-tech products,
where the cost of production is the primary factor in setting the price.
2. Value-based pricing: Siemens uses value-based pricing when it wants to
highlight the unique features and benefits of its high-tech products. The
company assesses the value its products provide to customers and sets a price
based on that value, rather than cost. For example, Siemens may use value-
based pricing for its innovative technology products that offer significant
benefits to customers, such as improved efficiency and lower maintenance
costs.
3. Volume discount pricing: This pricing model rewards large volume customers
for buying in bulk. Siemens may offer volume discounts for its products,
encouraging customers to purchase more and increasing the likelihood of
securing long-term business. For example, Siemens may offer a discount to a
company that buys a large quantity of products, such as industrial automation
systems.
4. Customer segment pricing: Siemens tailors its pricing strategy based on the
specific needs and budgets of different customer segments. For example,
Siemens may offer lower prices to small businesses or cost-sensitive
customers, while charging a premium to large corporations that require higher-
end products and services.
5. Dynamic pricing: This model allows Siemens to adjust its prices in real-time
based on changes in supply and demand, market conditions, and other factors.
For example, Siemens may use dynamic pricing for its energy management
systems, adjusting prices based on real-time energy usage data and market
conditions.

Siemens may also use a combination of these pricing models, depending on the nature
of the product or solution and the needs of the customer.
In year 2014, global revenues of Siemens was estimated at euro 71.9 billion in their
annual report. Company has projected its products as advanced offerings for
developed economies and has marketed them at premium prices as it has adopted
a premium pricing strategy for them. In order to tap untapped and
emerging markets of developing countries like China, India and Brazil it has adopted a
penetration policy and has kept its pricing policy competitive and reasonable.

In such countries it has decided to follow a policy of maximum value at minimum cost.
Siemens has offered reliable, qualitative and affordable products for customers who
are quality conscious and price-sensitive. As these products are made locally, it’s
costing is also less and hence provides the company with ample revenues in emerging
markets.

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