price architecture

Price architecture refers to the overall price structure of a product portfolio.

The pricing of individual products or categories is based on the customer’s varying willingness to pay. The chosen price architecture makes a product portfolio structured and transparent for the customer. This not only gives the customer better orientation, but also makes price management easier for the supplier. Along with retail companies with a large product range, the pricing architecture is also particularly relevant for internationally operating companies. In food retailing, for example, a tripartite price architecture is often evident. In addition to inexpensive trademarks, other products in the mid-price segment and expensive premium brands are also offered. Internationally operating companies like Apple design the price architecture of their product portfolio according to the customers’ willingness to pay in the respective target country.