CH04-EX03. Groundwater Level Measurement Equipment B2G Public Procurement Case

• Related Chapter: CH04. How Channel and Customer Relationship Reshape Price Structure
• Related MN/KM: MN06 / KM048

Think it through

This is a B2G public-procurement case of groundwater level measurement equipment sold to local governments.

1. Why did a price band have to be set between consumer price and actual selling price in the public procurement process? What transaction structure had to be reflected?
2. What approach was set as the primary channel in this case?

Show answer and walkthrough

• What this case illustrates: In a public procurement channel, a price band is set between consumer price and actual selling price to reflect transaction structure such as discounts, commissions, and consignment sales fees, with direct proposal-based sales to local governments used as the primary channel.

Content

In the doctoral dissertation’s groundwater level measurement equipment case, a price band was set between consumer price and actual selling price. This was to account for discounts, commissions, consignment sales fees, and the possibility of future supply-price negotiations with distribution partners during the public procurement process. At the same time, direct proposal-based sales targeting local governments was set as the primary channel.

Source: Doctoral dissertation (2022), B2G case — price structure and channel structure.