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Back to ANALYSIS Module 1-E: Recommendations on Prices, Discounts and MDF








 




According to the type of business model selected, numerous decisions must be made with regard to the price and discount policies in Europe. Software in Europe helps its customers make the best decisions by delivering a set of documented recommendations about the following points :

  • Price policies
  • It may appear sensible to slightly modify the software retail price ("MSRP") on the European markets, or conversely to align them with the original prices in the home country. We suggest the right course of action, depending on :
    • The sales model selected
    • The competitive landscape locally
    • The risks of "grey market" (parallel importation)
    • The software piracy risks in the considered country
    • The need to fund certain localization or business development investments.

  • "End user" discount policies
  • Discounts are often proposed to end users in the frame of volume purchases or Volume Licensing Programs (VLP). We advise you on the proposed discount rates and applicable discount brackets, considering that the quantities required for deeper discounts are mostly unattainable in smaller European countries.

  • "Partner" discount policies
  • When the selected sales model is totally or partially indirect, we help you determine in each country which is the best discount policy for :
    • Master distributors
    • VARS and reseller partners
    • OEMs
    • Strategic partners
    • Manufacturers and integrators, etc.

  • Rebates and marketing funds policies (MDF)
  • Any sales model involving master distributors generally entails the introduction of :
    • A rebate, i.e. a variable percentage of additional margin paid quarterly/anually by the software publisher to the distributor if mutually agreed sales goals are met.
    • An MDF (Market Development Fund), percentage accrued by the software publisher to the distributor on the basis of its purchases during the previous quarter.

    We help you determine the appropriate percentages for these two elements, according to the positionning of your software and to the respective European country .

    When you have made your decision and adjusted each of these points, we localize your price list and include in it these recommendations.
     
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