Element

Performance Criteria

Elements describe the essential outcomes of a unit of competency.

Performance criteria describe the performance needed to demonstrate achievement of the element. Where bold italicised text is used, further information is detailed in the required skills and knowledge section and the range statement. Assessment of performance is to be consistent with the evidence guide.

1. Confirm market research and forecasts.

1.1.Analyse market research and forecasts to ascertain supply of and demand for products and services.

1.2.Assess fundamentals affecting supply and demand in the marketplace.

1.3.Review historical data and current forecasts.

1.4.Determine opportunity for products or services to penetrate new markets.

2. Set price for goods or services.

2.1.Determine cost of providing products and services.

2.2.Determine prices and profit margins.

2.3.Apply relevant business policy and procedures to manage changes to prices.

2.4.Analyse margins and risk.

2.5.Review future market and business objectives and performance indicators.

2.6.Consider impact of government, taxation and financial market trends prior to setting price.

2.7.Set price.

3. Announce price for goods or services.

3.1.Assess mechanisms for communicating current and future prices.

3.2.Consider future price trends and information relevant to the specific market prior to announcing new price structures.

3.3.Determine best alternatives to communicate and secure prices.

4. Establish trading terms for the business.

4.1.Analyse profitability and parameters for shaping trading terms.

4.2.Analyse long term forecasted impact of trading terms established with individual customers.

4.3.Confirm processes for approving trading terms.

4.4.Establish supplier trading terms.

4.5.Finalise business customer trading terms.

4.6.Finalise direct customer trading terms.

4.7.Approve trading terms according to business policy and procedures.

This section describes the essential skills and knowledge and their level, required for this unit.

Required skills

interpersonal skills to:

communicate pricing internally and externally through clear and direct communication

share information

use language and concepts appropriate to cultural differences

use and interpret non-verbal communication

negotiation skills to establish supplier trading terms

literacy skills to:

interpret business policy and procedures

organise and analyse information from written and electronic sources

generate reports

numeracy skills to:

analyse numerical and mathematical information on pricing and market growth

establish prices for products and services and maintain margins

response to competitor activities

Required knowledge

business policy and procedures in regard to:

job role and responsibilities

seeking approval for effective trading terms

finalising trading terms and setting prices

communicating prices

factors affecting supply and demand for a range of products and services including:

impact of taxation and other regulatory controls affecting a market

price trends

overall supply chain management issues and trends

information on prices and market growth

sourcing historical data

prioritising work schedule

information sources on product and supply arrangements for customers

relevant legislation relating to trade

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, the range statement and the Assessment Guidelines for this Training Package.

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the following is essential:

establishes trading terms to meet business outcomes

maintains business relationships and profit margins over time

communicates prices in the most effective and efficient manner

identifies and responds to impact of forecasts and research on prices

ability to anticipate and respond to competitor activities and pricing policies

ability to manage prices for a range of products or services within a customer, geographic or market area (e.g. trading terms, communication to customers and businesses, risk analysis, margin identification)

maintains sustainable business targets in consideration of margins, market share, customer relationships and trading terms.

Context of and specific resources for assessment

Assessment must ensure access to:

a real or simulated work environment

business or sample policy and procedures in regard to price management

an accounting system

budgetary information

relevant documentation, such as:

financial and market reports

business policy and procedures manuals

a variable market.

Methods of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples are appropriate for this unit:

observation of performance in the workplace

third-party reports from a supervisor

a case study

written or verbal questioning to assess knowledge and understanding.

Guidance information for assessment

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended.

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording in the performance criteria is detailed below.

Market research and forecasts may encompass:

sales

cash flow

net profit

payroll

staff expenditure

capital

maintenance costs

market trends.

Factors influencing prices and profit margins may include:

profit margin

volume of sales

market share

competitor activities

quality

presentation or merchandising of the product

associated sales

associated promotions

promotional tie-ins or co-location.

Business policy and procedures may relate to:

sale of goods and services

pricing of merchandise

communicating with customers and suppliers

setting trading terms.

Mechanisms for communicating may include:

manual or electronic catalogues

public notification

print and visual media

electronic media and means

verbal

annual reports

internal or external price reports

seasonal reports.

Trading terms may relate to:

pricing

delivery

partnerships and exclusivity

credit and payment terms.

Customers may include:

new and existing customers

internal or external customers

business customers or individuals

customers with a range of social, cultural and ethnic backgrounds and physical and mental abilities

customers with routine or special needs.