Overview of Pricing Dimension Structure in Revenue Management Cloud

This article gives an overview about Pricing Dimension Structure in Revenue Management Cloud, including its components and importance. The diagram below shows the components of a Pricing Dimension Structure:

Pricing Dimension Structure Instance is the management structure of Pricing Dimensions. It provides additional settings here at the instance level of the Pricing Dimensions, such as enabling of the Creation of Dynamic Combinations. The relationship between the Pricing Dimension Structure and the instance is 1 to 1.

When the Creation of Dynamic Combinations is enabled, this means that combinations can be added dynamically, You don't have to pre-define the combinations because we are saying that they can be dynamically added when you are defining the Standalone Selling Price.

Pricing Dimension Structure acts like a Key Flexfield (KFF) and will allow your organization to depict its current pricing policies. Each structure is composed of segments, and a structure can have up to 30 segments. Each of these segments need a value set for each segment in your structure.  

Value Sets

A value set determines the data type that will be used by the segment and will validates and control the values and that are acceptable for that segment. Also, a Value Set dictates the Size and Numerical Precision of a Segment.

Each Value Set can have different types of validation such as Independent, Format Only, Table, Dependent, etc. It is the best practice to always use independent. More information can be found from the Oracle Official Documentation. 

In the example above, the Pricing Dimension "Hardware Products Discount Policy" is composed of three Pricing Dimension Segments (Geographical Region, Deal Size, Customer Type). 

The Segment "Customer Type" has the data type "Character" and the acceptable values are only "Government" and "Commercial". As for the segment "Deal Size", you can define the ranges of amounts that will be acceptable. 

Below is a quick video demonstration on how to create Pricing Dimension Instances, Structures and Value Sets in Revenue Management Cloud:

Pricing Bands

Price Bands are optional pricing configurations. Each segment in Pricing Dimension Structure can have a label. Price Bands Type can be Set, Quantity or Amount:

In the Example below, Quantity Band defines the price if the customer is purchasing between a certain number of units.  

We are looking at volume of the units purchased. The more units we sell, the lower the price is going to be for the customer. You want to give them a favorable price.

As for the Amount band, it is saying if the deal size is between a certain amount, it will correspond to a certain unit price. 

So you have the values high, medium, and low. And then these are the dollar ranges there. This means the more the customer buys, the lower the price will be.

The Set Band, on the other hand, uses criteria other than volume and deal size. This means that you can drive your pricing without looking at the size or volume of the deal. If you look at this example below, it uses the geographical information. 

We see here North America. And then we see here the countries within North America, the United States. Countries that belong to the European Union. And that might be a criteria that you want to use in your Pricing Dimension Structure.

The implementation task of creating Price Bands is "Manage Pricing Dimension Bands for Revenue Management".

Deploying the Pricing Dimension Structure

Once the structure has been finalized, you need to run a Deployment process for your structure to validate the structure and make it available to be used.

Below is a quick video demonstration on how to create Pricing Dimension Assignments in Revenue Management Cloud:

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