PURCHASING AND PRICING STRATEGY

An effective purchasing strategy can save your business money. A purchasing strategy defines
how your company buys things. Its primary goal is to reduce the bottom line and maximize cost
savings by reducing inefficiencies, establishing approval workflows, and forming a tactical
buying plan to get desired results

Strategic procurement is a critical part of effective supply chain management. Companies

benefit from it to reduce costs, mitigate risks, build strong supplier relationships, increase
efficiency, and stay ahead of the competition.

What is the pricing strategy?

A pricing strategy is an approach businesses use to determine what prices they should
charge for their products and services. It involves analyzing the market and customer
demand, understanding customer needs, evaluating production costs, and setting
competitive prices that maximize profits.

Products of a higher price tend to be associated with higher value. Attract buyers: If a price is
too high, the customer may not be able to afford it. The ideal price should be set at a level that
attracts people to buy your product or service, compared with a competitor.

Activity 1.
1. What is the importance of Purchasing Strategy?
2. Why Pricing Strategy is necessity in a company?
3. What is the relationship of these 2 things?
4. As a student how will you apply the essence of purchasing strategy in your daily lives.