Patent Application
20050261963
The present application relates generally to the field of product pricing and, in one example embodiment, to a method and system to calculate a purchase price automatically for a promotional product.
The sale of promotional products, also called advertising specialties, has traditionally been practiced as a broker-customer relationship where a commissioned broker presents various lines of products and decoration choices to a customer. For example, a customer may call a broker in connection with a promotion of the customer's company (e.g., a client appreciation golf tournament). The broker will present the customer with a choice of products (e.g., hats, shirts, mugs, etc.) that can be decorated utilizing one of a number of decoration technologies (e.g., embroidery, silk-screen, printing, etc.). The customer may, for example, select a golf shirt, onto which a logo of the relevant company can be embroidered. The broker then coordinates activities between a product vendor or manufacturer, a decorator and the customer to ensure that an order for the relevant promotional product is completed to the satisfaction of the customer.
These catalogs typically include per unit prices for the undecorated products. The catalog typically provides many prices per unit for each of the undecorated products. The per unit price for any given undecorated product usually varies significantly depending on the quantity ordered in each order. Consequently, the price for a promotional product order is indeterminable from the catalog without specifying the quantity to be ordered.
These catalogs also typically include formulas, incorporating a plurality of variables, used to calculate a decoration charge. These variables include such data as the number of units to be decorated, the number of colors to be used in the decoration, the size of the decoration, and the technique to be used in applying the decoration. Consequently, the price for a promotional product order is indeterminable from the catalog without specifying a plurality of variables, including the quantity to be ordered and the decoration (for example, a logo and text message) to be applied.
These catalogs also typically include formulas, incorporating a plurality of variables, used to calculate packaging or fill charges. These variables include such data as the number of units to be packaged or filled and the type of packaging or fill to be used. Consequently, the price for a promotional product order is indeterminable from the catalog without specifying a plurality of variables, including the quantity, packaging, and fill to be ordered.
At the time an order is about to be placed, customers wanting to compare prices from multiple distributors can specify the requirements on a particular order and solicit firm quotes on the order as specified. Corporate purchasing departments, however, often face a more difficult problem when evaluating distributor pricing. Corporations often want to consolidate their purchasing of promotional products with a single distributor 14 in order to achieve volume-based pricing efficiencies. Within a corporation, a purchaser (or purchasing department) 17 is typically responsible for selecting that distributor 14. In making this selection, the purchasing department will evaluate the expected costs of acquiring its promotional products from a number of competing distributors 14. However, this evaluation is difficult because, at the time of selection and contracting, the purchasing department typically does not know what particular products, quantities, decoration, packaging, fill or other services the corporation will require during the term of the contract. The distributor and purchasing department also do not know what new products and services will appear in new catalogs introduced during the term of the contract.
Because actual prices cannot be negotiated, distributors and purchasing departments typically negotiate and agree upon a method of calculating promotional products prices, this method to be applied in the future when a specific product and decoration combination is ordered.
Currently, such contracts between customers 16 and distributors 14 frequently take one of two approaches, namely (1) a “market basket” approach, or (2) a “cost plus” approach. Under the “market basket” approach, the customer 16 will provide distributors 14 with a list of promotional products that the customer 16 believes it may order under the contract at some future date. Each distributor 14 is asked to quote firm prices on the listed promotional products. This is an attempt to address the above-identified problem of the customers 16, and specifically a purchaser 17, not knowing with sufficient certainty which promotional products may be ordered under the contract in the future. However, it would be appreciated that few customers 16 have any real way of predicting what promotional products (including decoration) may be ordered in the future. Promotional products as specified on the “market basket” list typically represent a small percentage of promotional products that will be ordered during the life of the contract. Accordingly, distributors 14 are tempted to provide very low price quotes for “market basket” promotional products, but then to recoup profits on orders for promotional products that fall outside the “market basket” list. Simply put, the “market basket” approach itself does not give the customer 16 much control of the costs of orders that fall outside the “market basket” list.
Turning now to the “cost plus” approach, a problem with this approach is that distributors 14 do not have a uniform cost structure. Accordingly, while a particular distributor 14 may offer to provide promotional products at a specified gross margin or mark-up, it is difficult to evaluate whether the gross margin or mark up offered by one distributor is better than that offered by another because the base costs, to which the gross margin or mark up will be added, typically vary among distributors. Consequently, the lowest gross margin or mark up being offered frequently will not yield best price to a customer 16 because the specific distributor offering the lower gross margin or mark up 14 may have costs that are higher than those of another distributor 14. Further, as “cost plus” contracts frequently are written as a percentage of costs, such contracts create a disincentive to the distributor 14 to manage costs. For example, a distributor 14 may not resist a price increase from a supplier 12 because the price increase is passed to the customer 16. The distributor 14 may even earn more as a result of the higher cost if, for example, the distributor 14 and the customers 16 have agreed that the customer's 16 price will be the distributor's cost, plus an agreed-upon percentage.
According to one aspect, there is provided a method to contract for a purchase price for a promotional product, where the promotional product is unspecified at the time of contracting. A purchaser and a distributor agree that the purchase price for the unspecified promotional product will be calculated, at the time of an order, based on reference data in the example form of a reference price (or pricing) for the as yet unspecified promotional product. The reference data may be identified as being a particular price or prices to be published within a promotional product catalog issued by a supplier of the promotional product, or any other publicly available price (or determinable information utilizing which a price for a promotional product may be calculated). For example, the reference pricing may be derived from an agreed-upon formula and data set (e.g., an average of a selected group of published tiered prices)
According to a further aspect, there is provided a method to calculate a purchase price automatically for a promotional product. Reference data for a promotional product is electronically captured, and stored in a database. An electronic request for a purchase price for the promotional product is received, via a communications network, from a requester. The purchase price is automatically calculated for the promotional product based on the reference data. The reference data may be specified for the promotional product with reference to a catalog of a supplier of the promotional product. According to an even further aspect, there is provided a method to establish an agreement regarding a purchase price for a promotional product to be specified (or identified) at a future date. A source from which reference data for the promotional product will be determinable at the future date is identified. A purchase price for the promotional product is specified based on the reference data as determinable from the source at the future date. The specification of the purchase price for the promotional product, based on the reference data, is communicated to a third party.
One aspect also extends to a method to solicit bids for a promotional product from a plurality of distributors. This method includes providing an identifier for reference data (e.g., a promotional product catalog identifier) to each of the plurality of distributors. Each of the plurality of distributors is requested to provide a formula according to which a purchase price for the promotional product would be calculated, based on the reference data, at an unspecified future time.
Another aspect includes a method automatically to calculate a purchase price for a promotional product. In advance of a price calculation operation, reference data for the promotional product is electronically captured, and store in a database, a source of the reference data having been identified and agreed to by a distributor and a customer, in advance of the capturing of the reference data. In advance of the price calculation operation, a formula to calculate the purchase price (based at least partially on the reference data) is electronically captured, the formula having been identified and agreed to by the distributor and the customer, in advance of the capturing of the formula. An electronic request for the purchase price for the promotional product is received, via a communications network, from a requester. The purchase price for the promotional product is automatically calculated utilizing the reference data and the formula.
Other features will be apparent from the accompanying drawings and from the detailed description that follows.
An embodiment of the present invention is illustrated by way of example and not limitation in the figures of the accompanying drawings, in which like references indicate similar elements and in which:
A method and a system to calculate a purchase price automatically for a promotional product are described. In the following description, for purposes of explanation, numerous specific details are set forth in order to provide a thorough understanding of an embodiment of the present invention. It will be evident, however, to one skilled in the art that the present invention may be practiced without these specific details.
For the purposes of the present document, the term “promotional product” shall be taken to include any product or service that is made available by a manufacturer or distributor for use in a promotional manner, and shall be taken to include products to which a custom decoration is or may be applied, and other pre-decorated or undecorated products that are made available for promotional purposes.
Reference data may refer to any publicly available data, or determinable information, utilizing which a price for an promotional product may be calculated. For example, the reference data may be derived from an agreed-upon formula and data set. Further, the reference data, and possibly the manner in which the reference data is calculated, may be different for different promotional products and for different purchasers.
In one example embodiment, the present invention seeks to address the problem, identified above, that results from the separation of a purchaser 17 from a requisitioner 19 within a corporate customer 16, and the desirability of negotiating price for unspecified promotional products. At a high level, one aspect of the present invention seeks to provide a mechanism whereby a purchaser 17 of promotional products, for example, is able to evaluate contract offers from multiple distributors 14 in a meaningful manner. This meaningful comparison is facilitated in that a purchase price for an unspecified promotional product is specified, in each of multiple contract offers, in terms of reference data (e.g., reference pricing) that will be known to both the customer 16 and the distributor 14 when an order for the unspecified promotional product may be placed at some future date. In this way, a purchaser 17 is able to make a meaningful comparison between various contract offers, as each of these contract offers will express a purchase price for the unspecified promotional product based on common reference data.
One example embodiment of a system to facilitate the above-described mechanism is a described below. The provision of the mechanism is not a dependent upon the existence of such a system, and the described system is intended to be an unlimiting example of a technology infrastructure that may underlie the mechanism.
In one embodiment, a server side of the networked environment is a network-based distributor platform 25, operated by a distributor 14 so as to provide customers 16 of the distributor 14 with a network-based service for the placement of orders for promotional products and for the management of a relationship between a distributor 14 and a customer 16. Of course, the present invention is not limited to a distributor platform 25, and this platform 25 merely provides an example context within which one embodiment of the present invention is described. Turning to the example network-based distributor platform 25, a web server 26 and an Application Program Interface (API) server 28 are each coupled to, and facilitate access to, an application server 30, which hosts a number of applications, application components and/or application modules. Specifically, the application server 30 is shown to host a visualization engine 32, an order creation and processing engine 34, a pricing engine 36 and a capture engine 38. The application server 30 in turn is coupled to a database server 40 that provides access to a database 42. The database 42, as will be described in further detail below, includes a number of tables storing data that is utilized by the various engines 32-38 that execute on the application server 30.
On the client side of the networked environment 24, multiple client machines 44 each host a client application 46 that communicates with the network-based distributor platform 25 via a network 48 (e.g., the Internet). A client application 46 may be a browser application (e.g., the Microsoft Internet Explorer (IE) browser) or a dedicated client application (e.g., a dedicated purchasing application) that interacts with the network-based distributor platform 25. Further, while the client applications 46 are shown in
The visualization engine 32 is responsible, in one example embodiment of the present invention, for generating composite images to represent promotional products. Specifically, the visualization engine 32 has access to base produce images and decoration images stored within the database 42. The visualization engine 32 further allows a user, for example utilizing a client application 46, to create a composite image that depicts the application of a particular decoration to a particular base product so as to enable a user to preview a promotional product visually prior to placing an order. The visualization engine 32 is furthermore able to determine specifications (e.g., base product and decoration specifications) for a promotional product from input provided by a user during the creation of a composite image. For example, during creation of a composite image representing a promotional product, a user will specify a base product, decoration method, imprint area, quantity, number of decoration colors, etc., each of which may be recognized by the visualization engine 32 and provided to the pricing engine 36 for utilization in the calculation a sales or quote a price for a particular promotional product.
The order creation and processing engine 34 is responsible for the final order creation, back-end processing and auditing of orders.
The capture engine 38 electronically captures catalog information, including catalog price information, for promotional products offered by a range of suppliers 12. In one embodiment, the capture engine 38 may interact with an upload application 52, executing on a manufacturer machine 50, to upload catalog information to the application server 30, and to store such catalog information in the database 42. In an alternative embodiment, the capture engine 38 may provide a convenient interface 54 to a user 56 who is tasked with manually extracting and inputting information from catalogs of various suppliers 12. In this way, the capture engine 38 may facilitate the electronic capture of catalog information that is manually inputted by a user 56.
The pricing engine 36 is shown to include a base product pricing module 58, a decoration pricing module 60, a product options module 62, an upcharges module 64, and a shipping and tax module 66. The base product pricing module 58 is, as will be described in further detail below, responsible for calculating a sales, or quote, price for a base product (e.g., shirt, mug, etc.) for a promotional product. The decoration pricing module 60 is responsible for calculating the sales, or quote, price of decorations (e.g., imprints, embroidery, etc.) that are applied to the base product in the manufacture of the promotional product. The product options module 62 calculates purchase price components for options (e.g., material upgrades, accessories etc.) that may be available in connection with a particular base product. The upcharges module 64 is responsible for calculating upcharges (e.g., price increases for a particular product that may result from size increases in a base product) with respect to a promotional product. The shipping and tax module 66 is responsible for the calculation of shipping and tax charges that may be applicable to a specific promotional product.
The database 42 is shown to include a number of pricing tables corresponding to the modules of the pricing engine 36. Specifically, the database 42 is shown to include a base product pricing table 68, a decoration pricing table 70, a product options table 72, an upcharges table 74, and a shipping and tax table 76. Additionally, the database 42 is shown to include a supplier data table 78, a contract data table 80, and a customer table 82.
Returning to
The contract data table 80 contains information regarding contracts between a distributor 14 operating the network-based distributor platform 25 and customers 16 of the relevant distributor 14. Specifically, each entry of the contract data table 80 includes a customer identifier, a value representing a percentage discount off an End Column Price (ECP) 88 that the relevant distributor 14 has agreed to provide to the relevant customer 16, and a value indicating a percentage discount off a decoration price, as calculated using formulas and prices described in the catalog, that the relevant distributor 14 has agreed, in terms of the contract, to provide to customer 16. Each of a number of distributors 14 may, for example, be requested to provide a formula, according to which a purchase price for the promotional product would be calculated, based on the reference data, at an unspecified future time.
In one embodiment, multiple percentage discounts off the ECP 88 may be provided on a tiered basis, with the percentage increasing according to an agreed volume or value tiering level. Specifically, the percentage discount provided on the ECP 88 is negotiated between the distributor 14 and the customer 16 and, in one embodiment of the present invention, may be applied to all purchases of promotional products by the customer 16 through the distributor 14. Similarly, the percentage off a decoration price, as calculated using formulas and prices described in the catalog, may be applicable to the purchase of all promotional products by the customer 16 through the distributor 14.
Returning briefly to
The method 100 commences at block 102 with the electronic capture of catalog price information for promotional products in the supplier data table 78. As stated above, this electronic capture of the catalog prices may be performed by way of an upload of catalog information from a supplier 12 to the network-based distributor platform 25 operated by a distributor 14. Alternatively, a distributor 14 may have a user 56 manually input information contained in printed catalogs into the capture engine 38, utilizing the interface 54. The captured catalog price information, in one embodiment, includes two components, namely a base product price component (e.g., the tiered pricing information 86) and a decoration price component, which may be expressed by one or more formulas or guidelines published in a catalog of a specific supplier 12. Other catalog price information that may be captured includes product options, pricing information and shipping and tax information. Further, at block 102, catalog information included within the supplier data table 78, described above with reference to
At decision block 104, a determination is made as to whether a request for a purchase price (e.g., a quote) for a promotional product is received. This request may be received from a quotation process or from a charge process initiated by the order creation and processing engine 34.
On receipt of a request for a purchase price for a promotional item, at block 106, the pricing engine 36 parses the request to retrieve customer identification, base product, decoration, quantity, timing, and delivery information. In one embodiment, wherein the request for purchase price includes a visual specification of a promotional product (e.g., a composite image and associated input information received from a customer 16), the pricing engine 36 may parse this visual product specification information and extract the above-identified information therefrom.
At block 108, the base product pricing module 58 of the pricing engine 36 accesses the supplier data table 78 to retrieve an End Column Price (ECP) 88 for the base product.
At block 110, the base product pricing module 58 accesses the contract data table 80 to retrieve contract details between the relevant distributor 14 and the customer 16. Specifically, at block 110, the base product pricing module 58 may issue a request, via the database server 40, which includes the customer identification information extracted at block 106. The contract details that are accessed at block 110 include, inter alia, a percentage value representing the percentage off the ECP 88 that the relevant customer 16 is entitled to in terms of the contract with the distributor 14.
At block 112, the pricing engine 36 calculates a purchase price for the relevant promotional product utilizing the reference pricing information. For example, the pricing engine 36 may calculate the purchase price by deducting the percentage off the ECP 88, determined at block 110, from the ECP 88. Of course, the pricing engine 36 may, in other embodiments, calculate the purchase price in any of a number of ways, and by applying any of a number of formulas, which utilized a specified reference pricing.
Having now calculated a base product purchase price at blocks 108-112, the method 100 proceeds to blocks 114-118, where a decoration purchase price is calculated for the promotional product. Specifically, at block 114, the pricing engine 36 accesses the supplier data table 78 to retrieve a decoration formula, originally captured from an appropriate catalog, for the base product and the specified decoration.
At block 116, the pricing engine 36 proceeds to apply decoration values, determined at block 106, to variables of the decoration formula in order to calculate a decoration charge.
At block 118, the pricing engine 36 accesses the contract data table 80 to retrieve contract details applicable to the specific customer 16, these contract details including a percentage off a decoration charge.
At block 119, the pricing engine 36 then calculates a decoration purchase price by subtracting the percentage off decoration charge determined at block 118 from the decoration charge calculated at block 116.
Having now calculated the base product purchase price and the decoration purchase price, the method 100 proceeds to block 120, where the pricing engine 36 generates message information to communicate the calculated base product and decoration purchase prices to the requester, from whom the request was received at decision block 104.
At block 124, the generated message information is communicated to the requester. The message may also be communicated to an e-procurement system. In one embodiment, this message information may be included within a generated mark-up language document (e.g., an HTML document) that it communicated to a client machine 44 for display by a client application 46 to a customer. In an alternative embodiment, the message information may be included within an email, Instant Message (IM), Short Message Service (SMS) message or any other message type for communication to the requester.
The method 100 then terminates at termination block 126.
The various accesses to the tables of the database 42 that are described above with reference to
It will be noted that the above-described example method 100 utilizes the ECP 88 as a predetermined reference pricing to which a discount value is applied. However, in alternative embodiments of the present invention, any catalog price appearing in a catalog for a specific promotional product may be utilized as a predetermined reference pricing to which a discount is applied. For example, certain product catalogs from suppliers 12 may include only a single column, in which case catalog prices contained within that single column would be utilized. In an alternative embodiment, a catalog price from any specified column within a catalog may be utilized in the calculations found above.
Further, the discounting of the predetermined catalog price has been described above as being a percentage discount. In alternative embodiments, the discount may be calculated in other ways. For example, a predetermined dollar value could be deducted from a predetermined catalog price. The reference pricing may of course also be some price other than the ECP 88.
The above-described method 100 for the calculation of a purchase price differs from the “market basket” approach and the “cost plus” approach described above in that the purchase price for a promotional product is calculated based on, or utilizing, a predetermined reference pricing as published in a catalog, and in one embodiment, is agnostic with respect to the quantity of promotional products purchased.
In an alternative embodiment, the calculation of the base product purchase price as performed in blocks 108-112 may implement a predetermined tiered price structure, where the percentage off the ECP 88 may be tiered dependent upon the quantity of promotional products purchased, or the value of the promotional products purchased, for example. A greater percentage off the End Column Price may be extended to the customer where the number of promotional products purchased exceeds a predetermined threshold. In this case, the accessing of the contract data table 80 at block 110 would involve providing quantity information, parsed at block 106, to the database server 40 for inclusion within an access request to the database 42.
The method 100, described above with reference to
Turning to the first example user interface 130, illustrated in
User selection of the “quote” hypertext link 134 illustrated in
At block 162, the customer 16 specifies a catalog price as a predetermined reference pricing to be used in the calculation or determination of purchase prices by multiple distributors 14. In one example embodiment, the predetermined reference pricing may be specified to be the ECP 88 for each product, as published within a specific catalog, or within a collection of catalogs.
At block 164, the predetermined reference pricing specification is communicated from the customer 16, for example, to a plurality of distributors 14.
At block 166, the customer 16 requests purchase price information for promotional items from the multiple distributors 14. The requests include a requirement that the purchase price be calculated (or expressed) in terms of the predetermined reference pricing that was previously specified and communicated to the multiple distributors 14.
At block 168, the customer 16 receives purchase price information for one or more promotional items from each of the multiple distributors 14, the received purchase prices having been calculated utilizing the predetermined reference pricing.
At block 170, the customer 16 is able to compare the purchase prices, received from the multiple distributors 14, against each other, and make a meaningful comparison as each of the purchase prices would have been calculated based on the specified and predetermined reference purchase price. In this way, the customer 16 can identify whether one distributor is providing a more effective pricing than another.
The method 160 then terminates at block 172.
The example computer system 200 includes a processor 202 (e.g., a central processing unit (CPU) a graphics processing unit (GPU) or both), a main memory 204 and a static memory 206, which communicate with each other via a bus 208. The computer system 200 may further include a video display unit 210 (e.g., a liquid crystal display (LCD) or a cathode ray tube (CRT)). The computer system 200 also includes an alphanumeric input device 212 (e.g., a keyboard), a user interface (UI) navigation device 214 (e.g., a mouse), a disk drive unit 216, a signal generation device 218 (e.g., a speaker) and a network interface device 220.
The disk drive unit 216 includes a machine-readable medium 222 on which is stored one or more sets of instructions (e.g., software 224) embodying any one or more of the methodologies or functions described herein. The software 224 may also reside, completely or at least partially, within the main memory 204 and/or within the processor 202 during execution thereof by the computer system 200, the main memory 204 and the processor 202 also constituting machine-readable media.
The software 224 may further be transmitted or received over a network 226 via the network interface device 220.
While the machine-readable medium 292 is shown in an example embodiment to be a single medium, the term “machine-readable medium” should be taken to include a single medium or multiple media (e.g., a centralized or distributed database, and/or associated caches and servers) that store the one or more sets of instructions. The term “machine-readable medium” shall also be taken to include any medium that is capable of storing, encoding or carrying a set of instructions for execution by the machine and that cause the machine to perform any one or more of the methodologies of the present invention. The term “machine-readable medium” shall accordingly be taken to included, but not be limited to, solid-state memories, optical and magnetic media, and carrier wave signals.
Thus, a method and a system to calculate a purchase price automatically for a promotional product have been described. Although the present invention has been described with reference to specific example embodiments, it will be evident that various modifications and changes may be made to these embodiments without departing from the broader spirit and scope of the invention. Accordingly, the specification and drawings are to be regarded in an illustrative rather than a restrictive sense.
The present application claims priority to provisional application no. 60/573,176 filed May 20, 2004, which is incorporated herein by reference.
| Number | Date | Country | |
|---|---|---|---|
| 60573176 | May 2004 | US |
