Pricing policy within what limits. Theoretical approach to the formation of an enterprise's pricing policy

25.09.2019

A firm's pricing policy represents the overall goals that a company intends to achieve by setting prices for its products. However, setting prices for a company's products is largely an art: a low price causes the buyer to associate with low quality of the product, a high price excludes the possibility of purchasing the product by many buyers. In these conditions, it is necessary to correctly formulate the company’s pricing policy, keeping in mind the relationships.

In accordance with the Methodological recommendations of the Ministry economic development and trade of the Russian Federation (Order No. 118 dated October 1, 1997), price policy refers to the general goals that the enterprise intends to achieve with the help of prices for its products. The development of a pricing policy includes several successive stages:

Target selection;

Demand determination;

Cost analysis;

Analysis of competitors' prices;

Choosing a pricing method;

Setting the final price;

Development of a price modification system.

Each step of setting a price is associated with certain restrictions, problems and difficulties that a thoughtful entrepreneur should know about in advance.

Pricing policy goals

The pricing policy of many enterprises is to cover costs and make a certain profit. Some enterprises try to sell goods as expensive as possible. This practice indicates a lack of necessary experience and knowledge in the field of pricing. Therefore, it is important for an enterprise to study various pricing policy options, evaluate their features, conditions, areas, advantages and disadvantages of use.

The main goals of the pricing policy of any enterprise are the following.

Ensuring the continued existence of the company. In the presence of excess capacity, intense competition in the market, changes in demand and consumer preferences, enterprises often reduce prices in order to continue production and liquidate inventories. In this case, profit loses its meaning. As long as the price covers at least the variables and part fixed costs, production can continue. However, the issue of enterprise survival can be seen as a short-term goal.

Maximizing profits, ensuring profitability. Setting this goal means that the company seeks to maximize current profits. It estimates demand and costs for different levels prices and selects the price that will provide maximum cost recovery.

The goal of maintaining the market involves maintaining the enterprise's existing position in the market or favorable conditions for its activities, which requires taking various measures to prevent a decline in sales and intensification of competition.

The short-term achievement of maximizing price turnover, stimulating maximization of turnover, is chosen when the product is produced corporately and it is difficult to determine the structure and level of production costs. Therefore, it is considered sufficient to know only the demand. To achieve this goal, a percentage of commission on sales volume is set for intermediaries. Maximizing turnover in the short term can also maximize profits and market share in the long term.

Ensuring maximum sales growth. Firms pursuing this goal believe that increasing sales will lead to a reduction in production costs per unit of output and, on this basis, to an increase in profits. Given the market reaction to the price level, such firms set them as low as possible. This approach is called market offensive pricing policy. If an enterprise reduces the prices of its products to the minimum acceptable level, increases its share of participation in the market, achieving a reduction in production costs per unit of goods as production increases, then on this basis it will be able to continue to reduce prices. However, such a policy can give a positive result only if a number of conditions are present: a) if the market sensitivity to prices is very high (prices have been reduced - demand has increased); b) if it is possible to reduce production and sales costs as a result of increasing production volumes; c) if other market participants do not also begin to reduce prices or cannot withstand competition.

“Skimming the cream” from the market. This comes at the expense of high prices. This occurs when a company sets the highest possible prices for its new products, significantly higher than production prices. This pricing is called “premium”. Certain market segments benefit from the emergence of new products, even at high prices, and benefit from cost savings and better satisfaction of their needs. As soon as sales at a given price decline, the company reduces the price to attract the next group of customers, thereby achieving the maximum possible turnover in each segment of the target market.

Achieving leadership in quality. A firm that succeeds in establishing a reputation as a leader in quality sets a high price for its product to cover the high costs associated with improving quality and the costs of research and development carried out to achieve this.

The listed goals of pricing policy can be implemented in different time, at different prices, there may be different ratios between them, but together they all serve to achieve a common goal - long-term profit maximization.

To carry out all work related to the development and successful implementation of pricing policies, large and medium-sized enterprises create a special structural unit - the pricing department. In enterprises with small and irregular sales volumes, as well as a small number of personnel, this function is performed by the head of the company.

The activities of the pricing department are constantly built in close contact with other departments of the enterprise and, above all, with the marketing, sales and financial departments. Much attention The work focuses on collecting information on current market conditions, determining the market structure of the company's products, drawing up alternative sales forecasts for products that are possible at different price levels, studying the expected responses of competitors to the company's pricing policy, as well as analyzing a possible increase in sales and revenue without changing prices.

Objectives and mechanism for developing pricing policy

The enterprise independently determines the scheme for developing a pricing policy based on the goals and objectives of the company’s development, organizational structure and management methods, established traditions in the enterprise, the level of production costs and other internal factors, as well as the state and development of the business environment, i.e. external factors.

When developing a pricing policy, the following issues are usually resolved:

in what cases it is necessary to use a pricing policy;

when it is necessary to respond with price to the market policies of competitors;

what pricing policy measures should accompany the introduction of a new product to the market;

for which products from the assortment sold need to change prices;

in which markets it is necessary to carry out an active pricing policy and change the pricing strategy;

how to distribute certain price changes over time;

what pricing measures can improve sales efficiency;

how to take into account existing internal and external restrictions in the pricing policy entrepreneurial activity.

Price is an extremely important tool that can be used to convince consumers to buy a product. Price is one of many factors that determines the demand for a product.

How companies set prices for their goods or services -. Many factors influence the price a firm charges for its product, including such things as the cost of producing the product, the prices of competing companies, the type of product, and the company's desired market share.

At an enterprise it is an important component of economic activity, a way to ensure effective management. Pricing policy refers to the general principles that a company intends to adhere to in setting prices for its goods and services.

The pricing policy of an enterprise also consists of pricing tactics. A pricing strategy can be defined as specific long-term actions to plan prices for products. It is aimed at determining the activities of the production and distribution systems of the enterprise in order to obtain the planned profit from sales, as well as ensuring the competitiveness of the products produced and services provided in accordance with the goals and objectives of the overall strategy of the enterprise.

In the pricing process, a company must determine what goals it wants to achieve through the sale of goods. Every enterprise has short-term and long-term goals. It is necessary to develop the skills to recognize and, with the help of pricing policies, implement the optimal ratio large quantity goals.

Pricing Policy is the main element of the marketing activities of the enterprise. However, among all the constituent elements of marketing, price has two important advantages:

Changing prices is faster and easier than, for example, developing a new product or running an advertising campaign, or, finally, finding new, more efficient ways to distribute products.
, carried out by the company, instantly affects the business and its financial and economic results. An ill-considered financial policy can have a negative impact on the sales dynamics and profitability of the enterprise.

The pricing policy of an enterprise is a multifaceted concept. Any enterprise not only sets prices for its products, it creates its own pricing system, which covers the entire range of products, taking into account differences in production and sales costs for individual categories consumers, for different geographical regions, the seasonality of consumption of goods is also taken into account.

In market conditions, it is necessary to pay attention to the competitive environment. Some firms themselves take the initiative to change prices, but more often they simply react to them. To properly use all the advantages of market pricing, managers need to study the essence of pricing policy, the sequence of stages in its development, the conditions and advantages of their application.

The pricing policy of an enterprise is the activity of its management to establish, maintain and change prices for manufactured goods, aimed at achieving the goals and objectives of the enterprise. The development of a pricing policy includes several successive stages:

Development of pricing goals;
Analysis of pricing factors;
Choosing a pricing method;
Deciding on the price level.

Attention should be paid to the complexity of forming the pricing policy of an enterprise, since a large number of trading and trading and intermediary firms are involved in pricing along the entire path of goods from manufacturer to consumer. Companies seeking to implement a competent pricing policy must first of all solve a number of problems:

- obtaining maximum profit;
- conquering the sales market;
- cost reduction;
- fight against competing enterprises;
- growth in production and sales.

The pricing policy of an enterprise can be characterized as a set of economic and organizational measures aimed at achieving, through prices, the best results of economic activity, ensuring sustainable sales and obtaining sufficient profits. Pricing policy involves interconnected consideration of the need to recover costs and obtain the necessary profits, focusing on the state of demand and competition; a combination of uniform and flexible prices for products.

Pricing policy significantly depends on what type of market the product is being promoted to.. There are four types of markets, each of which has its own pricing problems:

Price and pricing policy for the enterprise- the second essential element of marketing activity after the product. That is why the development and prices should be given the closest attention by the management of any enterprise that wants to most effectively and long-term develop its activities in the market, since any false or insufficiently thought-out step immediately affects the dynamics of sales and profitability.

Pricing in an enterprise is a complex process consisting of several interrelated stages: collection and systematic analysis of market information.

Justification of the main goals of the enterprise's pricing policy for a certain period of time, the choice of pricing methods, the establishment of a specific price level and the formation of a system of discounts and price premiums, adjustments to the pricing behavior of the enterprise depending on the prevailing market conditions.

Pricing policy is a mechanism or model for making decisions about the behavior of an enterprise in the main types of markets to achieve its business goals.

Objectives and mechanism for developing pricing policy.

When developing a pricing policy, the following issues are usually resolved:

in what cases it is necessary to use a pricing policy when developing;

when it is necessary to respond with price to the market policies of competitors;

what pricing policy measures should accompany the introduction of a new product to the market;

for which products from the assortment sold need to change prices;

in which markets it is necessary to carry out an active pricing policy and change the pricing strategy;

how to distribute certain price changes over time;

what pricing measures can improve sales efficiency;

how to take into account the existing internal and external restrictions on business activity in the pricing policy and a number of others.

Setting pricing policy goals.

At the initial stage of developing a pricing policy, an enterprise needs to decide exactly what economic goals it seeks to achieve by producing a specific product. Typically, there are three main goals of pricing policy: ensuring sales (survival), maximizing profits, and retaining the market.

Ensuring sales (survival) is the main goal of enterprises operating in conditions of fierce competition, when there are many manufacturers of similar goods on the market. The choice of this goal is possible in cases where consumer demand is price elastic, as well as in cases where the enterprise sets the goal of achieving maximum growth in sales volume and increasing total profit by slightly reducing income from each unit of goods. An enterprise may proceed from the assumption that an increase in sales volume will reduce the relative costs of production and sales, which makes it possible to increase sales of products. For this purpose, the company lowers prices - it uses so-called penetration prices - specially reduced prices that help expand sales and capture a large market share.

Setting a profit maximization goal means that the company seeks to maximize current profits. It evaluates demand and costs at different price levels and selects the price that will maximize cost recovery.

The above pricing policy objectives are usually long-term, intended to cover a relatively long period of time. Except long term venture can also set short-term pricing policy goals. Typically these include the following:

stabilization of the market situation;

reducing the impact of price changes on demand;

maintaining existing price leadership;

limiting potential competition;

improving the image of an enterprise or product;

promotion of sales of those goods that occupy weak positions in the market, etc.

Patterns of demand. The study of patterns of demand formation for a manufactured product is important stage in developing the pricing policy of the enterprise. Demand patterns are analyzed using supply and demand curves, as well as price elasticity coefficients.

The less elastic the demand is, the higher the price the seller of the product can set. And vice versa, the more elastic the demand is, the more reason there is to use a policy of reducing prices for manufactured products, since this leads to an increase in sales volumes, and consequently, the income of the enterprise.

Prices calculated taking into account the price elasticity of demand can be considered as an upper bound on price.

To assess the sensitivity of consumers to prices, other methods are used to determine the psychological, aesthetic and other preferences of buyers that influence the formation of demand for a particular product.

Cost estimation. To implement a well-thought-out pricing policy, it is necessary to analyze the level and structure of costs, estimate the average costs per unit of production, compare them with the planned production volume and existing prices on the market. If there are several competing enterprises on the market, then it is necessary to compare the enterprise's costs with the costs of its main competitors. Production costs form the lower limit of price. They determine the capabilities of the enterprise in the field of price changes in competition. The price cannot fall below a certain limit that reflects production costs and an acceptable level of profit for the enterprise, otherwise production is economically unprofitable.

Analysis of prices and products of competitors. The difference between the upper limit of price, determined by effective demand, and the lower limit, formed by costs, is sometimes called the entrepreneur's playing field for setting prices. It is in this interval that the specific price for a particular product produced by the enterprise is usually set.

The price level set must be comparable to the prices and quality of similar or similar goods.

By studying competitors' products, their price catalogs, and interviewing customers, an enterprise must objectively assess its position in the market and, on this basis, adjust product prices. Prices may be higher than those of competitors if the product produced is superior to them in terms of quality characteristics, and vice versa, if the consumer properties of the product are inferior to the corresponding characteristics of competitors' products, then prices should be lower. If the product offered by an enterprise is similar to the products of its main competitors, then its price will be close to the prices of competitors’ products.

Pricing strategy of the enterprise.

The enterprise develops a pricing strategy based on the characteristics of the product, the possibility of changing prices and production conditions (costs), the market situation, and the relationship between supply and demand.

An enterprise can choose a passive pricing strategy, following the “price leader” or the bulk of producers in the market, or try to implement an active pricing strategy that primarily takes into account its own interests. Choice pricing strategy In addition, it largely depends on whether the enterprise offers a new, modified or traditional product on the market.

When releasing a new product, an enterprise usually chooses one of the following pricing strategies.

“Skimming” strategy. Its essence lies in the fact that from the very beginning of the appearance of a new product on the market, the highest possible price is set for it based on the consumer who is ready to buy the product at that price. Price reductions take place after the first wave of demand subsides. This allows you to expand the sales area and attract new customers.

This pricing strategy has a number of advantages:

a high price makes it easy to correct an error in price, since buyers are more favorable to a price reduction than to an increase;

a high price ensures a fairly large profit margin at relatively high costs in the first period of product release;

the increased price allows you to restrain consumer demand, which has certain meaning, since at a lower price the enterprise would not be able to fully satisfy the needs of the market due to the limitations of its production capabilities;

a high initial price helps to create an image of a quality product among buyers, which can facilitate its sale in the future when the price decreases;

an increased price increases demand in the case of a prestigious product.

The main disadvantage of this pricing strategy is that a high price attracts competitors - potential manufacturers of similar goods. The skimming strategy is most effective when competition is somewhat limited. A condition for success is also the presence of sufficient demand.

Market penetration (implementation) strategy. To attract the maximum number of buyers, the company sets a significantly lower price than market prices for similar products from competitors. This gives him the opportunity to attract the maximum number of buyers and helps him conquer the market. However, this strategy is used only in the case where large production volumes make it possible to compensate for its losses on an individual product with the total amount of profit. The implementation of such a strategy requires great material costs, which small and medium-sized firms cannot afford, since they do not have the ability to quickly expand production. The strategy is effective when demand is elastic, as well as when an increase in production volumes ensures a reduction in costs.

The psychological price strategy is based on setting a price that takes into account the psychology of buyers and the characteristics of their price perception. Typically the price is set at just below a round sum, giving the buyer the impression of a very precise determination of production costs and the impossibility of deception, a lower price, a concession to the buyer and a win for him. The psychological point that buyers like to receive change is also taken into account. In fact, the seller wins due to an increase in the number of products sold and, accordingly, the amount of profit received.

The strategy of following the leader in an industry or market involves setting the price of a product based on the price offered by the main competitor, usually the leading firm in the industry, the enterprise that dominates the market.

A neutral pricing strategy is based on the fact that the price of a new product is determined based on the actual costs of its production, including the average rate of profit in the market or industry.

The prestige pricing strategy is based on setting high prices for products that are very High Quality with unique properties.

The choice of one of the listed strategies is carried out by the management of the enterprise depending on the target number of factors:

speed of introduction of a new product to the market;

share of the sales market controlled by this company;

the nature of the product being sold (degree of novelty, interchangeability with other products, etc.);

payback period for capital investments;

specific market conditions (degree of monopolization, price elasticity of demand, range of consumers);

the position of the company in the relevant industry (financial situation, connections with other manufacturers, etc.).

Pricing strategies for goods sold on the market for a relatively long time can also be based on different kinds prices

The sliding price strategy assumes that the price is set almost directly depending on the relationship between supply and demand and gradually decreases as the market becomes saturated (especially the wholesale price, but the retail price can be relatively stable). This approach to setting prices is most often used for consumer products. In this case, prices and production volumes of goods closely interact: the larger the production volume, the more opportunities the enterprise (firm) has to reduce production costs and, ultimately, prices. The given pricing strategy requires:

prevent a competitor from entering the market;

constantly care about improving product quality;

reduce production costs.

Long-term prices are set for consumer goods. It usually works long time and is weakly subject to change.

Prices in the consumer segment of the market are set for the same types of goods and services that are sold to different social groups with different income levels. Such prices can, for example, be set for various modifications of passenger cars, for air tickets, etc. It is important to ensure correct ratio prices for various products and services, which poses a certain difficulty.

A flexible pricing strategy is based on prices that quickly respond to changes in supply and demand in the market. In particular, if there are strong fluctuations in supply and demand in relatively short time, then the use of this type of price is justified, for example, when selling some food products (fresh fish, flowers, etc.). The use of such a price is effective when there are a small number of levels of management hierarchy in an enterprise, when the rights to make decisions on prices are delegated to the lowest level of management.

The preferential price strategy provides for a certain reduction in the price of goods by an enterprise that occupies a dominant position (market share 70-80%) and can provide a significant reduction in production costs by increasing output volumes and saving on costs of selling goods. The main task of the enterprise is to prevent new competitors from entering the market, to force them to pay too high a price for the right to enter the market, which not every competitor can afford.

The strategy for setting prices for discontinued products, the production of which has been discontinued, does not involve selling at reduced prices, but targeting a strictly defined circle of consumers who need these particular goods. In this case, prices are higher than for regular goods. For example, in the production of spare parts for cars and trucks of various makes and models (including discontinued ones).

There are certain features of setting prices serving foreign trade turnover. Foreign trade prices are determined, as a rule, on the basis of prices of the main world commodity markets. For exported goods within the country, special prices are set for export. For example, until recently, for mechanical engineering products exported, premiums were applied to wholesale prices for export and tropical versions. For some types of scarce products, when exported, customs duties are added to prices. In many cases, free retail prices are set for imported consumer goods based on the relationship between supply and demand.

Selecting a pricing method.

Having an idea of the patterns of formation of demand for a product, the general situation in the industry, prices and costs of competitors, and having determined its own pricing strategy, the enterprise can move on to choosing a specific pricing method for the product produced.

Obviously, a correctly set price must fully compensate for all costs of production, distribution and marketing of goods, and also ensure a certain rate of profit. There are three possible pricing methods: setting a minimum price level determined by costs; establishing a maximum price level generated by demand, and, finally, establishing an optimal price level. Let's consider the most commonly used pricing methods: “average costs plus profit”; ensuring break-even and target profit; setting prices based on the perceived value of the product; setting prices at current prices; "sealed envelope" method; pricing based on closed bidding. Each of these methods has its own characteristics, advantages and limitations that must be kept in mind when developing prices.

The simplest method is considered to be “average costs plus profit,” which involves adding a markup to the cost of goods. The amount of the markup can be standard for each type of product or differentiated depending on the type of product, unit cost, sales volume, etc.

The manufacturing company itself must decide which formula it will use. The disadvantage of the method is that the use of a standard markup does not allow taking into account the characteristics of consumer demand and competition in each specific case, and, consequently, determining the optimal price.

Yet the markup-based calculation method remains popular for a number of reasons. First, sellers know more about costs than about demand. By tying price to costs, the seller simplifies the pricing problem for himself. He does not have to frequently adjust prices based on fluctuations in demand. Secondly, it is recognized that this is the fairest method in relation to both buyers and sellers. Thirdly, the method reduces price competition, since all firms in the industry calculate prices using the same average cost plus profit principle, so their prices are very close to each other.

Another cost-based pricing method aims to achieve a target profit (break-even method). This method makes it possible to compare the amount of profit received at different prices, and allows a company that has already determined its profit rate to sell its product at a price that, with a certain production program, would allow it to achieve this task to the maximum extent.

In this case, the price is immediately set by the company based on the desired amount of profit. However, to recover production costs, it is necessary to sell a certain volume of products at a given price or at a higher price, but not a smaller quantity. Here, price elasticity of demand becomes especially important.

This pricing method requires the firm to consider different pricing options, their impact on the volume of sales needed to break even and achieve target profits, and analyze the likelihood of achieving all of this at each possible price of the product.

Setting a price based on the “perceived value” of a product is one of the most ingenious methods of pricing when all larger number When calculating prices, firms begin to base their prices on the perceived value of their goods. In this method, cost targets fade into the background, giving way to customers’ perception of the product. To form an idea of the value of a product in the minds of consumers, sellers use non-price influence methods; provide after-sales service, special guarantees to customers, the right to use the trademark in case of resale, etc. The price in this case reinforces the perceived value of the product.

Setting prices at current prices. By setting a price taking into account the current price level, the company is mainly based on the prices of competitors and pays less attention to indicators of its own costs or demand. It can set a price above or below the price of its main competitors. This method is used as a price policy tool primarily in those markets where homogeneous goods are sold. A firm that sells similar products on a market with high degree competition has very limited ability to influence prices. Under these conditions, on the market of homogeneous goods, such as food products, raw materials, the company does not even have to make decisions on prices; its main task is to control its own production costs.

However, firms operating in an oligopolistic market try to sell their goods at a single price, since each of them is well aware of the prices of its competitors. Smaller firms follow the leader, changing prices when the market leader changes them, rather than depending on fluctuations in demand for their goods or their own costs.

The current price level pricing method is quite popular. In cases where the elasticity of demand is difficult to measure, firms believe that the current price level represents the collective wisdom of the industry, the key to obtaining a fair rate of profit. And besides, they feel that sticking to the current price level means maintaining a normal equilibrium within the industry.

Pricing based on the sealed envelope method is used, in particular, in cases where several firms compete with each other for a contract for machinery and equipment. This most often happens when firms participate in tenders announced by the government. A tender is a price offered by a company, the determination of which is based primarily on the prices that competitors can set, and not on the level of its own costs or the amount of demand for the product. The goal is to win the contract, so the firm tries to set its price below that of its competitors. In cases where the firm is unable to foresee the actions of competitors in prices, it proceeds from information about their production costs. However, as a result of information received about the possible actions of competitors, the company sometimes offers a price below the cost of its products in order to ensure full production capacity.

Pricing based on sealed bidding is used when firms compete for contracts during bidding. At its core, this pricing method is almost no different from the method discussed above. However, the price established on the basis of closed bidding cannot be lower than cost. The goal here is to win the auction. The higher the price, the lower the likelihood of receiving an order.

Having chosen the most suitable option from the methods listed above, the company can begin to calculate the final price. In this case, it is necessary to take into account the buyer’s psychological perception of the price of the company’s product. Practice shows that for many consumers the only information about the quality of a product is contained in the price, and in fact the price acts as an indicator of quality. There are many cases where, with rising prices, the volume of sales, and, consequently, production increases.

Price modifications.

An enterprise usually develops not just one price, but a system of price modifications depending on various market conditions. This pricing system takes into account the peculiarities of the quality characteristics of the product, product modifications and differences in the assortment, as well as external factors sales, such as geographical differences in costs and demand, intensity of demand in certain market segments, seasonality, etc. Various types of price modification are used: a system of discounts and surcharges, price discrimination, stepwise price reductions for the offered range of products, etc.

Price modification through a system of discounts is used to stimulate buyer actions, for example, purchasing larger quantities, concluding contracts during a period of sales decline, etc. In this case, different discount systems are used: discount, wholesale, functional, seasonal, etc.

Discounts are discounts or reductions in the price of goods that encourage payment for goods in cash, in the form of an advance or prepayment, or before the due date.

Functional or trade discounts are provided to those companies or agents that are part of the sales network of the manufacturing enterprise, provide storage, accounting for commodity flows and sales of products. Typically, equal discounts are used for all agents and companies with which the company cooperates on an ongoing basis.

Seasonal discounts are used to stimulate sales during the off-season, i.e. when the underlying demand for a product falls. In order to maintain production at a stable level, the manufacturing enterprise may provide post-season or pre-season discounts.

Modification of prices to stimulate sales depends on the goals of the company, the characteristics of the product and other factors. For example, special prices may be set during any events, for example, seasonal sales, where prices for all seasonal goods are reduced, exhibitions or presentations, when prices may be higher than usual, etc. To stimulate sales, bonuses or compensation can be used for a consumer who purchased a product at a retail outlet and sent the corresponding coupon to the manufacturing company; special interest rates when selling goods on credit; warranty terms and maintenance agreements, etc.

The modification of prices on a geographical basis is associated with the transportation of products, regional characteristics of supply and demand, the level of income of the population and other factors. Accordingly, uniform or zonal prices may be applied; taking into account the costs of delivery and cargo insurance based on practice foreign economic activity the FOB price or franking system is used (supplier's ex-warehouse, ex-wagon, ex-border, etc.).

It is customary to talk about price discrimination when a company offers the same products or services at two or more different prices. Price discrimination manifests itself in various forms depending on the consumer segment, product forms and its application, enterprise image, time of sale, etc.

A stepwise reduction in prices for the offered range of goods is used in the case when an enterprise produces not individual products, but entire series or lines. The enterprise determines which price levels need to be introduced for each individual product modification. In addition to differences in costs, it is necessary to take into account the prices of competitors' products, as well as purchasing power and price elasticity of demand.

Price modification is possible only within the upper and lower limits of the established price.

Komi branch of the Federal State Budgetary Educational Institution of Higher Professional Education

"Vyatka State Agricultural Academy"

Test

in the discipline "Marketing"

on the topic: "Pricing policy"

Syktyvkar 2012

Introduction

1. Pricing policy and its features

1.1 General views

2 Objectives of pricing policy

2. Pricing policy and marketing

Conclusion

Bibliography

Introduction

Market and price are categories determined by commodity production. Moreover, the market is primary. This is explained by the fact that in commodity production, economic relations are manifested mainly not in the production process itself, but through the market. It is the market that acts as the main form of manifestation of commodity-money relations and value categories. In a market economy, the law of value plays an important role, which is implemented through the mechanisms of pricing and balancing supply and demand. It serves as one of the regulators of social production, facilitating the flow of resources from one sector of the economy to another and within individual sectors. In this regard, the function of price arises as a criterion for the rational placement of production.

Main feature market pricing is that the real process of price formation here occurs not in the sphere of production, not at the enterprise, but in the sphere of product sales, i.e. in the market, under the influence of supply and demand, commodity-money relations. The price of a product and its utility are tested by the market and are finally determined in the market. Since only on the market does public recognition of products as goods occur, their value also receives public recognition through the price mechanism also on the market.

The purpose of the test is to cover the topic: “Pricing policy.” To achieve this goal, it is necessary to solve the following tasks:

.Consider general features pricing policy.

2.Identify the relationship between pricing policy and marketing.

1. Pricing policy and its features

.1 General ideas

Pricing policy is the principles and methods for determining prices for goods and services. There are micro (at the firm level) and macro (in the sphere of state regulation of prices and tariffs) levels of price formation. The company's pricing policy is formed within the framework of the company's overall strategy and includes a pricing strategy and pricing tactics. Pricing strategy involves positioning the proposed product in the market.

Pricing policy reflects the general goals of the company that it seeks to achieve by setting the prices of its products. Price policy is general principles which an enterprise intends to adhere to in setting prices for its goods or services.

During the implementation of pricing policy, the company's management must adjust immediate activities and monitor the timing of strategy changes. Prices are actively used in competition to ensure a sufficient level of profit. Determining the prices of goods and services is one of the most important problems of any enterprise, since the optimal price can ensure its financial well-being. The pricing policy pursued largely depends on the type of goods or services offered by the enterprise. It is formed in close connection with planning the production of goods or services, identifying consumer requests, and stimulating sales. The price should be set in such a way that, on the one hand, it satisfies the needs and requirements of customers, and on the other hand, it helps to achieve the goals set by the enterprise, which is to ensure the receipt of sufficient financial resources. Pricing policy is aimed at establishing prices for goods and services depending on the current market conditions, which will allow the enterprise to obtain the volume of profit planned by the enterprise and solve other strategic and operational tasks.

As part of the overall pricing policy, decisions are made in accordance with the position in the target market of the enterprise, methods and marketing structure. The general pricing policy provides for the implementation of coordinated actions aimed at achieving the long- and short-term goals of the enterprise. At the same time, its management determines the general pricing policy, linking individual decisions into an integrated system: the relationship between the prices of goods within the company’s product range, the frequency of using special discounts and price changes, the ratio of prices to the prices of competitors, the choice of method for setting prices for new products.

Determining the pricing policy is based on the following questions:

what price a buyer would pay for the product;

How does a change in price affect sales volume?

what are the constituent cost components;

what is the nature of competition in the market segment;

what should be the level of the threshold price (minimum) that ensures the company’s break-even;

what discount can be provided to customers;

will delivery of goods and other factors affect the increase in sales volume? Additional services.

The general policy of the enterprise should ultimately be aimed at meeting specific human needs. Therefore, determining pricing policy is one of the most important areas practical activities enterprises.

1.2 Objectives of pricing policy

pricing demand marketing

In the absence of conditions for normal free pricing, one should either strictly limit the scope of free prices, or, allowing their free movement, carry out their state regulation. Therefore, it seems possible to determine the main objectives of pricing policy. When setting these objectives, first of all, the company will have to decide what specific goals it seeks to achieve with the help of a particular product.

The main goal and task of pricing policy on a market scale is to stop the decline in production, limit the rate of inflation, create incentives for commodity producers, and achieve an increase in income through production rather than prices. If the choice of target market and market positioning are carefully thought out, then the approach to developing the marketing mix, including the issue of price, is quite clear. After all, the pricing strategy is mainly determined in advance decisions taken regarding market positioning. At the same time, the company may pursue other goals. The clearer the idea about them, the easier it is to set the price. Examples of such goals that are often encountered in practice can be: ensuring survival, maximizing current profits, gaining leadership in terms of market share or in terms of product quality.

Ensuring survival becomes the main goal and task of the company in cases where there are too many competitors in the market - manufacturers and there is intense competition or customer needs change dramatically. To ensure the normal operation of enterprises and the sale of manufactured goods, firms are forced to set low prices in the hope of a favorable response from consumers. In this case, survival in the global market for an enterprise becomes more important than profit. As long as the reduced prices cover the costs of the hardship, firms can continue to operate for some time. commercial activities.

Many firms strive to maximize current profits. They estimate demand and production costs at different price levels and select one reasonable price, which will ensure maximum receipt of current profits and cash and maximum cost recovery. In all similar cases Current financial indicators for the company are more important than long-term ones. Other firms want to be leaders in terms of market share because the company that owns the most large share market will have the lowest costs and the highest long-term profits. Achieving leadership in terms of market share, they reduce prices as much as possible. A variant of this goal is the desire to achieve a specific increase in market share.

A company can set itself the main goal and task to ensure that its products are of the highest quality of all those offered on the market. This usually requires setting a price high enough to cover the costs of achieving high quality and expensive scientific research in the field of design development.

2. Pricing policy and marketing

There are two main ways to set prices for manufactured products based on the costs of production and marketing of the product and on market opportunities (purchasing power). The first method is called cost-based pricing, the second is demand-based pricing. The third, less common, but also important method is pricing based on prices for competitive products.

There are several factors that a company directly influences when choosing a pricing method for its product:

The value factor is one of the most important factors. Each product is capable of satisfying some customer needs to a certain extent. To agree on the price and usefulness of a product, you can: give the product great value, educate the buyer through advertising about the value of the product, adjust the price so that it corresponds to the real value of the product.

Cost factor - costs and profit make up the minimum price of the product. The simplest way to set prices: given known costs and expenses, add an acceptable rate of profit. However, even if the price only covers expenses, there is no guarantee that the product will be purchased. This is why some manufacturing enterprises go bankrupt; the market can value their goods lower than the cost of their production and sale.

Competition factor - competition has a strong influence on pricing policy. You can provoke a surge of competition by setting a high price for a product or eliminate it by setting a minimum price. If a product requires a special production method, or its production is very complex, then low prices will not attract competitors to it, but high prices will tell competitors what to do.

Sales promotion factor - included in the price of the product trade margin, which pays for the measures taken to stimulate the market. When releasing a product to the market, advertising needs to cross the threshold of perception before consumers become aware of the product. All funds spent on sales promotion must subsequently be recouped through product sales.

Distribution factor - the distribution of a good produced significantly affects its price. The closer the product is to the consumer, the more expensive it is for the manufacturer to distribute it. If the goods are delivered directly to the consumer, then each concluded transaction becomes a separate operation, the money intended for the supplier is received by the manufacturer, but its production costs also increase. The advantage of this distribution method is complete control over sales and marketing. When selling a product to a large retailer or wholesaler, sales are no longer counted in units, but in dozens, but control over sales and marketing is lost. Product distribution is the most important factor in marketing after the product itself. When purchased, a product rarely satisfies the needs of all customers completely. Therefore, manufacturers make concessions in quality, weight, color, technical data, etc. more or less willingly depending on the price level, but even if a given seller has the lowest prices on the market, no amount of advertising can compensate for the lack of the desired product in right time V in the right place. Finding competent distributors who would actively undertake the sale of goods is a very expensive matter. They will want to be paid for storing goods in warehouses and distributing goods immediately after they are sold. This amount should be included in the price and not exceed similar costs of competitors.

Factor public opinion- usually people have some idea about the price of a product, regardless of whether it is consumer or industrial. When purchasing a product, they are guided by certain price boundaries, or price radius, which determines the price at which they are willing to buy this product. The enterprise must either not go beyond the boundaries of this radius in the prices of its goods, or justify why the price for it goes beyond these limits. The manufactured product may be superior to existing analogues in some qualities, and if such advantages are perceived positively by customers, then the price for it can be raised, but if the advantages of this product are not so obvious, it is necessary to resort to additional advertising or other marketing techniques to stimulate the sale of this product On the market.

Service factor - customer service is involved in the pre-sale, sales and post-sale stages of the purchase and sale of goods. Customer service costs must be included in the price of the product offered. Such expenses usually include: preparation of quotes, calculations, installation of equipment, delivery of goods to the point of sale, training and retraining service personnel(sellers, cashiers, consumer consultants), providing a guarantee for the product or the right to pay in installments. Many products offered in the market do not require after-sales service, but a significant group of consumer goods (such as groceries and convenience goods) require pre-sales service, such as displaying them or demonstrating their qualities. All this service offered must be repaid through the price of the product.

The choice of pricing strategy constitutes the content of the enterprise's concept in determining prices for its products. This determines the planning of the enterprise’s revenue and profit from the sale of goods. An enterprise operating in market conditions, first of all, needs to develop a strategy and principles for determining prices, guided by which it can solve the problems facing it.

The absence of a clearly defined pricing strategy contributes to uncertainty in decision-making in this area by various departments of the enterprise (if it has a complex structure), can lead to inconsistency of these decisions and result in a weakening of the enterprise’s position in the market, losses in revenue and profit.

The company does not just set this or that price, it creates an entire pricing system that covers miscellaneous goods and products within the product range and taking into account differences in costs of organizing sales in different geographical regions, differences in levels of demand, distribution of purchases over time and other factors. In addition, the company operates in a constantly changing competitive environment and sometimes itself initiates price changes, and sometimes responds to competitors’ price initiatives.

A firm's strategic approach to pricing depends in part on the stages life cycle goods. The market launch stage places especially great demands. A distinction can be made between pricing a genuine new product protected by a patent and pricing a product that imitates existing products.

Pricing a Genuine New Product - A firm introducing a patented new product to the market may choose either a skimming strategy or a strong market penetration strategy when setting its price.

Cream-skimming strategy - many firms that have created patent-protected new products based on major inventions or the results of large-scale and therefore expensive R&D, when the costs of developing a new market (advertising and other means of promoting products to consumers) turn out to be too high for competitors, when necessary to produce a new product raw materials, materials and components are available in limited quantities or when it turns out to be too difficult to sell new products (if the warehouses of resellers are overcrowded, the economic situation is sluggish, and wholesale and retail are reluctant to enter into new transactions for the purchase of goods), at first they set the highest prices for them that can only be requested in order to “skim the cream” from the market. At the same time, only some market segments accept the new product. After the initial wave of sales slows, the firm lowers the price to attract the next tier of customers who are satisfied with the new price. By acting in this way, the company skims the maximum possible financial “cream” from a variety of market segments. It is desirable to maximize short-term profits until the new market becomes subject to competition.

Using the market skimming method makes sense under the following conditions:

) there is a high level of current demand from quite large number buyers;

) the costs of small-scale production are not so high as to negate the financial benefits of the company;

) a high initial price will not attract new competitors;

) a high price supports the image of a high quality product.

Strategy for strong market penetration - other companies, on the contrary, set a relatively low price for their new product in the hope of attracting a large number of buyers and gaining a large market share. An example of such a strategy would be the purchase of a large plant, setting the lowest possible price for a product, gaining a large market share, reducing production costs and, as they are reduced, continuing to gradually reduce the price. From a purely financial point of view, the position of an enterprise that follows this approach can be characterized by both an increase in the amount of profit and income on invested capital, and a significant drop in profitability. Therefore, when used intentionally low prices The management of the enterprise must calculate the possible consequences as accurately as possible, but in any case, the degree of risk is very high, since competitors can quickly react to a reduction in prices and significantly reduce the prices of their products. When analyzing the market and drawing up a sales forecast for an enterprise introducing new products to the market at a price below average, one must also take into account that the size of the price reduction for its products should be very significant (30-50%). And this is even with much more high level product quality, when there are many consumers in a particular market who are willing to pay a higher price for products of improved quality or a higher technical level. In this case, it does not matter whether we are talking about the enterprise entering a new, but, in general, long-established sales market or about promoting a new product on a fairly well-known market. In both cases, the management policy should be approximately the same - to penetrate the market through noticeably lower prices, accustom the consumer to the brand of your company or give him the opportunity to understand the advantages of your products and, therefore, secure a sufficient market share and sales volume . Only when the product is recognized in the market and its advertising among consumers on the word-of-mouth principle has begun, can the company revise both its production programs and product prices in the direction of increasing them. pricing demand marketing product

Elimination strategy - designed to prevent potential competitors from entering the market, its other purpose is to achieve maximum sales before a competitor enters the market. The price is therefore set as close to the costs as possible, which gives a small profit and is justified only by the large volume of sales. Small company could resort to this strategy to concentrate its activities on a small segment of the market: quickly enter it, quickly make a profit and just as quickly leave this segment.

The demand-following strategy is similar to the skimming strategy, but instead of holding the price at a constant high level and convincing buyers to enter new level consumption, the price is reduced under strict control. Often a product receives minor changes in design and features to make it significantly different from previous models. Sometimes you have to change to match the price reduction. appearance product, promotional activities, packaging or method of distribution. The price is held at each new reduced level long enough to satisfy all existing demand. As soon as sales volume begins to decline significantly, you should prepare for the next price reduction.

Thus, prices and pricing policy are one of the main components of marketing activities. Commercial results and the degree of efficiency of all production and marketing activities of a company or enterprise depend on how correctly and thoughtfully the pricing policy is structured.

Conclusion

The essence of a targeted pricing policy is to set such prices for goods and vary them depending on the position in the market in order to capture its share, ensure the competitiveness of goods in terms of price indicators, the intended volume of profit and solve other problems.

In conditions market economy The success of any enterprise or entrepreneur largely depends on how correctly they set prices for their goods and services. But this is not so easy to do, because prices are significantly influenced by a complex of political, economic, psychological and social factors. Today the price may be determined by the amount of costs for the production of a product, and tomorrow its level may depend on the psychology of buyer behavior. Consequently, when setting the price of a product, an entrepreneur must take into account all the factors influencing its level and set the price in such a way as to make a profit.

However, at present, a significant part of entrepreneurs in our country do not have the necessary theoretical and practical knowledge of the complex pricing mechanism for goods and services. As a result, they often make serious mistakes when setting prices, which in some cases leads to significant losses and sometimes to bankruptcy of enterprises.

Bibliography

Daly J. L. Effective pricing is the basis of competitive advantage. - M.: Publishing House "Williams", 2004.- 345 p.

2. Evdokimova T.G., Makhovikova G.A., Zheltyakova I.A., Pereverzeva S.V. Theory and practice of price management. - St. Petersburg: Neva, 2004. - 258 p.

Kotler F. Fundamentals of Marketing / F. Kotler - St. Petersburg: JSC Koruna, 2002. - 697 p.

Krylova G.D., Sokolova M.I. Marketing. Theory and practice: Textbook for universities. -M.: UNITY-DANA, 2004. - 655 p.

Parshin V.F. Pricing policy of an enterprise: a guide / V.F. Parshin. - Minsk: Vysh. school, 2010. - 336 p.

Prices and pricing: Textbook for universities / Ed. V.E. Esipova. 4th ed. - St. Petersburg: Peter, 2005. - 365 p.

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5. PRICING POLICY

Price policy- this is the management of the enterprise’s activities in establishing, maintaining and changing prices for manufactured products, carried out in line with the marketing concept and aimed at achieving its goals.

The type of market in which it operates has a significant impact on the formation of an enterprise's pricing policy. The basis for determining the type of market is the number of firms operating in the market. The analysis parameters also include: the type of product (the degree of its homogeneity and standardization), price control, conditions for entry into the industry, the presence of non-price competition, and the importance of marketing.

Based on the analysis of these parameters, four main types of market are distinguished: a pure competition market, a monopolistic competition market, an oligopolistic market and a pure monopoly market (Table 26).

A purely competitive market consists of many sellers and buyers of a standardized product. There are no serious legal, organizational, financial or technological restrictions for entering the industry. Since each firm produces a small portion of total output, none of them has much influence on the price level. Sellers in such markets do not spend much time developing a marketing strategy, since its role in such a market is minimal.

The number of firms operating in monopolistic competition markets is large, but there are far fewer participants in pure competition markets. As a rule, these are 20-70 enterprises. Entry into the industry is quite easy. Transactions in such a market are made in a wide range of prices. The presence of a price range is explained by the ability of manufacturers to offer customers different product options. Products may differ from each other in quality and appearance. Differences may also lie in the services accompanying the goods. Buyers see differences in supply and are willing to pay different prices for products. Control over prices is limited, since there are enough firms that the share of each in the total market is small. In such a market, the use of marketing measures is of great importance, but they have less influence on each individual firm than in an oligopolistic market.

Table 26

Characteristics of market types

Analysis Options	Market types
Analysis Options	Pure competition	Monopolistic competition	Oligopolistic competition	monopoly
Number of firms		So many		Some
Type of product		Standardized	Differentiated	Standardized or differentiated	Standardized or differentiated unique
Price control			Within narrow limits		Significant
Entering the Industry		No restrictions	There are no serious barriers	Limited complex barriers	Blocked
Non-price competition
The Importance of Marketing		Minimum		Significant	Minimum

An oligopolistic market consists of a small number of producers (usually 2 to 20) who are sensitive to each other's marketing strategies. The small number of sellers is explained by the fact that it is difficult for new applicants to penetrate this market due to the presence of a set of barriers: the need for large initial capital, ownership of patents, control over raw materials, etc. Products in such a market can be standardized (steel) or differentiated (automobiles). The degree of price control, exercised in various forms, is high.

In a pure monopoly, there is only one seller in the market producing a product that has no close substitutes. It may be a government entity, a private regulated monopoly, or an unregulated monopoly. A state monopoly can use price policy to achieve a variety of goals. A regulated monopoly is allowed by the state to set prices that ensure a “fair” rate of profit. An unregulated monopoly sets its own prices. Entry into a monopoly industry is blocked by various barriers.

Thus, each type of market has its own mechanisms, so the implementation of the same actions in the field of pricing policy in different markets leads to different results and has different meanings.

The method of establishing the initial price of a product consists of six stages.

1. Setting pricing objectives

Pricing objectives arise from the goals and objectives of the enterprise’s overall marketing policy. The main goals are presented in table. 27.

Table 27

Pricing policy goals

		Nature of the goal	Price level
	Sales maximization Achieving a certain market share	Long term
Current profit	Maximizing current profit Get cash quickly	Short	High (or upward trend in prices)
Survival	Ensuring cost recovery Maintaining the status quo	Short
Quality	Ensuring leadership in quality indicators Maintaining leadership in quality indicators	Long term

2. Determining the level of demand

Demand depends on price, and the degree of this dependence is determined by elasticity. Elasticity of demand– a quantitative characteristic of demand, reflecting a change in the quantity of demand in response to a change in the price of a product or some other parameter. The following types of elasticity of demand are distinguished:

direct price elasticity of demand;

income elasticity of demand;

cross price elasticity of demand.

3. Cost Estimation

The level of costs for the production and sale of goods allows us to determine the minimum price that the company must set to cover them.

4. Analysis of prices and products of competitors

The firm's price setting is influenced by the prices of its competitors' products. Focusing on a comparative analysis of the quality of competitors' products and their prices, the company has the opportunity to determine the average price range for its products.

5. Selecting a Pricing Method

The most common pricing methods are: cost plus markup, break-even analysis and target profit, pricing based on the perceived value of the product, pricing based on the level of competition, aggregate and parametric methods.

The “cost plus markup” method is the simplest method of pricing; it involves adding a certain markup to the full cost of the product. The prevalence of this method, in addition to its simplicity, is also determined by the fact that manufacturers are more aware of costs rather than demand. This method is considered fair; if all sellers use it, then prices for similar products are similar.

At the same time, the “cost plus profit” method also has significant disadvantages: it is not related to current demand and does not take into account the consumer properties of goods. In addition, total costs include fixed costs not associated with the production of a specific product; the methods of their distribution among products are conditional and can lead to price distortions.

Determining the price based on break-even analysis and ensuring the target profit is based on setting a price level that will provide the company with the desired amount of profit. Determining the price using this method can be done by calculation and graphically.

The obvious advantage of this method is to provide the company with a planned amount of profit. The disadvantage is that this method does not take into account the price elasticity of demand. Its use can also lead to a distortion of the real picture due to the conditional distribution of fixed costs among individual products.

The perceived value pricing method considers the consumer's perception of the product as the main factor taken into account. To form in the minds of the consumer the desired idea of the value of a product, non-price methods of influence are used.

Competition-based pricing (current price method) considers competitors' prices as the starting point when setting prices, while own costs and demand levels are taken into account only as additional factors. This method is especially popular in pure and oligopolistic competitive markets. In an oligopolistic market, this method is embodied in the “follow the leader” policy.

The aggregate method is used for goods consisting of individual products or assemblies (parts) and consists of simply summing the prices for individual elements of the product.

The parametric method is based on determining the price of a product based on a comparative formal analysis of the characteristics of the product in relation to the similar characteristics of the base product with a known price.

6. Setting the price

By using the selected pricing method, the initial price of the product is determined.

7. Development of dynamics of changes in the initial price of a product

The dynamics of changes in the initial price of a product depends on the chosen strategy. When changing the price of new products, two main strategies are used: “cream skimming” and “strong introduction”.

The “cream skimming” strategy consists of initially setting a high price for a new product based on narrow market segments and then gradually reducing the price to gradually cover other segments. A “hard penetration” strategy is based on using initial low prices to reach the widest market with the possibility of increasing prices later.

When developing price dynamics for existing products, two main types of strategies can be used: a rolling falling price strategy and a predominant price strategy.

The sliding falling price strategy is a logical continuation of the skimming strategy and consists in the fact that the price consistently slides along the demand curve, changing depending on the market situation. The preferential pricing strategy is a continuation of the strong implementation strategy, its essence is to achieve an advantage over competitors in terms of cost (then the price is set below the competitors' prices) or quality (then the price is set above the competitors' prices so that the product is regarded as high quality).

In addition to making strategic decisions, it is also necessary to develop pricing tactics, that is, carry out market price adjustments. Tactical decisions include decisions regarding the establishment of:

standard or flexible prices;

uniform or discriminatory prices;

psychologically attractive prices;

price discount systems.