Which pricing strategy is commonly used in SCM for competitive positioning?

The pricing strategy commonly used in supply chain management for competitive positioning is market-oriented pricing. This method focuses on setting prices based on the competitive landscape and what consumers are willing to pay, rather than solely on the cost of production or the internal value of the product.

Market-oriented pricing involves analyzing competitors' pricing strategies, market demand, customer preferences, and overall market conditions. By aligning prices with market expectations, companies can effectively position themselves to capture market share and respond dynamically to changes in the competitive environment. This approach ensures that pricing is not only reflective of internal costs but also responsive to external factors influencing customer purchasing decisions.

In contrast, cost-based pricing focuses on covering production costs plus a desired profit margin, which may not take into account competitive pressures or customer willingness to pay. Value-based pricing emphasizes the perceived value of a product to the customer, which can differ significantly from the market price. Dynamic pricing involves adjusting prices in real time based on supply and demand, but it may not be as effective for establishing a clear competitive position over the long term. Consequently, market-oriented pricing stands out as the more comprehensive strategy for competitive positioning in supply chain management.