Pricing methods table. Pricing

Topic "Pricing Methods"

Introduction

Chapter 1

1.1 Price structure

1.3 Pricing steps

2.2 Pricing methods

Conclusion

pricing monopoly market demand

Introduction

"Prices and pricing are one of the key elements of a market economy. Price is a complex economic category. Almost all the main problems of economic development and society as a whole intersect in it."

"The fundamental difference between market pricing and centralized pricing lies in the fact that the real process of pricing here takes place not in the sphere of production, not at the enterprise, but in the sphere of sales of products, i.e. in the market, under the influence of supply and demand, commodity money relations. The price of a commodity and its usefulness are tested by the market and finally formed in the market." **

Thus, prices corresponding to the Market model are formed on the basis of supply and demand, and the market is the main price regulator. Also, the main fundamental difference between market pricing and planned pricing is that the initial prices for goods are set by their owners, "economic entities".

Enterprises and firms sell their goods and services, in most cases, at prices set by them independently or on a contractual basis, and in some cases, which are provided for by legislative acts, at state prices. For the products of enterprises that occupy a monopoly position in the goods market, as well as for goods and services that determine the scale of prices in the economy and the social security of certain categories of citizens, state regulation of prices is carried out.

The price policy of the enterprise is the most important element of its strategy. In general, the pricing policy of an enterprise can be defined as the activity of its management in establishing, maintaining and changing prices for goods and services produced, and as an activity aimed at achieving the goals and objectives of the company. Price formation takes place at the level of the enterprise, and their coordination with the consumer is carried out at the time of concluding an agreement with him or an act of sale. The price of a product for an enterprise is not only an important factor determining its profit, but also a condition for the successful sale of goods. Therefore, it is necessary to develop appropriate approaches for setting the price level for manufactured products. The solution of this problem involves taking into account many factors and circumstances. Inside the enterprise, the price of a product is determined by the costs of its production, the value of which depends on the efforts of the enterprise itself, but when it enters the market, its level is determined by the emerging "market conditions" *. It follows from this that the market price for the enterprise is a value that it cannot influence. Therefore, each company seeks to establish its own pricing policy, the purpose of which is to maximize profits. Also, the pricing policy of the enterprise depends on the competitive "market structure" ** .

The pricing mechanism is the relationship between price, pricing factors, and the method of pricing. That is, the technology of the process of its origin, functioning, and change over time. Price formation can be represented as a process limited by the principles of the company's pricing policy. The pricing policy of an enterprise depends on a number of principles that are interrelated and depend on each other:

Enterprise strategy and its purpose;

Purpose of pricing;

Pricing strategy;

Pricing methods;

The decision on the value of the price;

The purpose and strategy of the enterprise constitute the economic policy of the enterprise, and the purpose and pricing strategy form the pricing policy. Therefore, the pricing policy of an enterprise can be defined as a set of relatively constant principles arising from the policy of an enterprise that are applied in solving issues related to setting prices. The pricing strategy of the enterprise expresses alternative ways to achieve a certain goal if it is necessary to make a decision on the price. Within the framework of a certain pricing policy, different strategies are possible. Pricing methods refers to the near-standard, knowledge-based or cost-based rules and schemes that are applied in pricing. The decision to set the price, which is taken at the enterprise, is a specific (expressed in monetary units) value selected from several options as a result of the process of its formation and the application of various pricing methods. Pricing decisions at the enterprise is the result of the practical application of the main directions of pricing policy with the involvement of various pricing methods. The pricing mechanism in the conditions of market relations is manifested through prices and their dynamics. Price dynamics is formed under the influence of two important factors - strategic and tactical. The essence of the strategic factor is that prices are formed on the basis of the cost of goods. This factor has a long-term prospective effect. The tactical factor is manifested in the fact that prices for specific goods are formed under the influence of market conditions. It can often change (within days, hours), as the dynamics of market changes is very high; a comprehensive study of these changes is required here.

Chapter 1

1.1 Price structure

"The formation of the price occurs in the process of movement of goods from the producer to the consumer, and its value depends on the number of intermediaries, the level of costs in each link, the share of profit received by each participant in the movement of goods, and the system of indirect taxation." *

The price begins to take shape even in the production process, and one of the important factors is the cost of the manufacturer. These are the costs associated with the production, transportation, storage, and marketing of products. In market conditions, an enterprise can survive and function normally only if it covers its costs from the proceeds received from the sale of products. The market price depends not only on demand, but also on supply - its volume, assortment, and cost level. Traditionally, in the domestic practice of pricing, when assessing the costs of an enterprise, the indicator "cost" is used, while in foreign countries the term "costs" is more common. Under the costs it is customary to understand all the costs that arise in the process of manufacturing and selling the product, as well as the functioning of the enterprise as a whole. The process of formation of costs in the sphere of production is quite complicated, and this is due to the fact that they arise at various stages of the production cycle, behave differently when the volume of production changes, and are formed both objectively necessary and as a result of unsatisfactory financial and economic activity. In accordance with the legislation in force in Russia, most of the costs of the manufacturer, directly related to the production and sale of the product, are included in its cost, and the other part of the costs associated with the formation of current assets, payment of taxes, sanctions, is reimbursed from various types of profit.

The cost price can be defined as a set of cash costs of the enterprise for the production and sale of products. The cost indicator does not include all the costs of the manufacturer, but only part of them, but it is he who is the main pricing factor in the activities of domestic producers. The costs associated with the production and sale of products, when planning, accounting and costing are grouped by items. The list of these articles, their composition and methods of distribution are determined by industry guidelines on planning, accounting and costing. (Taking into account the nature and structure of production developed on the basis of the "Regulations on the composition of costs"). The composition of the costs included in the cost of products or reimbursed from profits is determined by the tax policy of the state at each specific stage of economic development.

An important element in the composition of the price is profit, which is the monetary value of net income. This is the income that the enterprise receives in the aggregate in the process of producing products or goods and received after its sale at a set price. In a market economy, making a profit is the main goal of any commercial activity, since it is the main source of the formation of the material and financial resources of an enterprise, its production and social development. The more profit an enterprise receives, the wider its ability to develop, improve the financial situation of its employees, and strengthen its financial condition. The state is also interested in increasing profits, since income tax makes up a significant share of state budget revenues. The economic meaning of profit and the concept of its accounting calculation do not coincide. From the point of view of economic content, profit is a net income created in the course of the operation of the enterprise. The quantitative calculation of the value of various types of profit is determined by the cost accounting system and the procedure for the formation of financial results that operate in the country in accordance with the law. In turn, this process depends on the policy of the state in the field of taxation and may vary depending on the goals and objectives set. From the point of view of pricing, the indicator "profit from sale" is of interest, which has excellent features of formation in various areas of commodity circulation.

Indirect taxes are obligatory payments to the budget, this is a part of the net income created in enterprises and withdrawn to the budget indirectly, by including in the price of products, goods, buying which consumers pay indirect taxes. Indirect taxes are paid by enterprises, but consumers are the final payers, since enterprises, as it were, shift the amounts of taxes on each other and on the final buyer. Indirect taxes are of great socio-economic importance and play an important role in the country's economy. They are a significant source of state revenues, their share in the budget is significantly higher than the share of income tax. With the help of indirect taxes, the distribution and redistribution of income between various social groups of the population is carried out. Indirect taxes also have an impact on the price level, increasing it by about 30%, and for individual goods by 50%, so they are a factor in regulating the price level, a means of influencing their dynamics (inflation or deflation). In addition, the system of indirect taxes has an impact on production, trade, consumption, contributing to their growth or, conversely, reduction, that is, they allow you to regulate the movement of spheres of commodity circulation in accordance with the goals of economic development. Currently, two indirect taxes are applied: these are excise and value added tax.

Excise tax is included in the price of excisable products and is paid to the budget as these products are sold. Excises are set on goods and products, the level of consumption of which is not elastic in relation to price, or on scarce, highly profitable products and goods intended for the population, the production of which has a low cost. If the state did not withdraw excises to the budget, then enterprises producing excisable goods would have super profits. Thus, the excise tax is set for a limited range of goods and is included in the price once.

Value Added Tax (VAT) is a new element of the tax system for Russia and is taken from the practice of taxation in Western countries. In its economic essence, VAT is one of the forms of withdrawal to the budget of a part of the added value created in the process of production and sale of products, goods, construction, provision of services, performance of work. At each link in the distribution of goods, a part of the increase in value created by the labor of workers is withdrawn to the budget. This part is determined at established rates, included in the price and paid to the budget as products, goods, works, and services are sold. In accordance with the economic sense, the object of taxation is value added. Traditionally, value added is considered to consist of labor costs, social contributions, depreciation of fixed assets and profit from the sale. In the process of promoting goods to the consumer market, enterprises and organizations of the wholesale trade sector (supply and marketing, procurement, wholesale intermediary and trade and purchasing) participate, performing the functions of purchasing, storing, selling large consignments of goods (products) for their subsequent sale (retail trade). , public catering, other wholesale trade enterprises) or processing (industrial, agricultural enterprises). By reselling goods, they incur costs that need to be reimbursed, and also expect to make a profit. They realize these goals with the help of supply and marketing (wholesale) allowances, which, on the one hand, are the price for the services of wholesale enterprises, and on the other hand, an element of the price. Thus, supply and marketing (wholesale) allowances are part of the price and are intended to cover the costs that arise in the process of circulation of enterprises in this area and the formation of profit from the sale. The distribution costs of the wholesale link include the costs of transportation, storage, packaging of goods, rent or maintenance of storage facilities, wages with deductions for social needs of employees, advertising costs and other expenses. Due to large volumes of sales and resale of large lots, the level of distribution costs of wholesale trade is lower than that of retail trade. The amount of the realized supply and marketing allowance forms the gross income of the wholesaler. The value of the supply and marketing markup in the purchase price depends on the level of market prices (both acquisition and sale), the costs of the enterprise, and the desired profit. Retailers can set a price at the level of competitors' prices, then the value of the trade markup will be equal to the difference between the retail price (excluding VAT) and the price at which the goods are purchased (excluding VAT). The realized trade markup constitutes the retailer's gross income. It should be noted that the supply and marketing trade allowances themselves do not function independently, they get a real embodiment only after the sale of the goods, turning into the gross income of the enterprise. Thus, the final level of retail prices depends on the purchase price of the goods and on the size of the trade allowance. In Russia, due to the prevailing economic conditions, the majority of the population has low incomes and seeks to purchase goods at the lowest possible price, so those retailers that set prices slightly lower than competitors are in the most advantageous situation. As already noted, the price has an elemental composition and the more links in the distribution of goods, the higher the purchase price, because. certain elements are added to it at each stage. Therefore, the purchase of products and goods from manufacturers and agricultural enterprises allows minimizing prices.

Justification of the level of trade markup is the most crucial moment in the formation of the retail price. Its size should allow the enterprise, on the one hand, to cover costs and make a profit from the sale, and on the other hand, to ensure the competitiveness of retail prices for goods. Thus, when justifying the size of the trade allowance, it is necessary to take into account both the market situation for a particular product, and the costs and needs of the enterprise. The level and size of gross income depends on the size of the trade allowance. In fact, it is at the expense of gross income as a realized trade markup that costs are covered and profit is formed, therefore there are objective reasons for determining the minimum markup level.

1.2 Main factors affecting prices

When choosing a pricing strategy, the firm sets itself the task of identifying and analyzing all the factors that may affect prices. There are quite a lot of such factors, to a greater extent these are factors that are not controlled by the company. Some of them contribute to lower prices, others cause them to rise.

Factors contributing to price reduction:

Growth in production;

Technical progress;

Reducing production and distribution costs;

Growth in labor productivity;

Tax cuts;

Expansion of direct links;

Competition;

Factors causing price increases:

An increase in the amount of money in circulation;

Increase in taxes;

Unstable economic situation;

Decline in production;

Enterprise monopoly;

Excessive demand;

Salary growth;

Increasing the profit of the enterprise;

Improving the quality of goods;

Compliance with fashion;

Rising labor costs;

Low efficiency in the use of labor, land, equipment, capital.

To a large extent, the financial and credit sphere influences the level and dynamics of prices, while the change in the purchasing power of the monetary unit has a direct impact on prices. In a normally functioning economy, when there is a sufficient gold and foreign exchange reserve, the ratio between the sum of the prices of goods and the amount of money in circulation is relatively stable. In the absence of such a condition, the sum of prices begins to change in the "quantity of money - sum of prices" system. So, devaluation or persistent rumors about it cause a steady increase in prices.

The firm's decision to change its price is strongly influenced by the consumers of the goods. The relationship between prices and the number of purchases made at those prices can be explained in two ways. The first is the interaction of the laws of supply and demand and price elasticity. The second is the unequal reaction of buyers in different market segments to the price. It is customary to distinguish four categories of buyers according to their perception of prices and orientation in purchases:

Buyers who show great interest in choosing goods for their prices, quality and assortment; this group of buyers is greatly influenced by advertising that reveals the unique product advantage of the product, as well as additional useful properties;

Buyers who are sensitive to the "image" of the product; they pay the main attention to the service and quality of service, the attitude of the seller to themselves;

Buyers who support small firms, "brands" with their purchases and are ready to pay a higher price for the goods for their sake;

Buyers for whom the ergonomics, quality, convenience of the product is more important than its price.

State regulation of prices is carried out in several main areas. Legislation restricts attempts to collude on prices and establish fixed prices by producers of goods, representatives of wholesale and retail trade. No matter how "justified" these fixed prices are, they are considered illegal. Entrepreneurs who install them are severely punished, and huge fines are imposed on companies. Such violations are called "horizontal price fixing" * .

In order to avoid suspicion of such violations of the law, entrepreneurs should not: consult or exchange information with competitors about prices, discounts, terms of sale and granting a loan; denounce the prices, markups and costs of any firms at professional industry meetings; negotiate with competitors to temporarily reduce production in order to maintain high prices. The exception is an agreement on prices reached under the supervision of a state-authorized authority.

The state prohibits price discrimination if it harms competition. Therefore, manufacturers and wholesalers are obliged to offer their goods to different buyers - participants in the distribution channels on the same terms. Price discrimination is permissible in relation to goods of different quality, but in this case, the manufacturer is required to prove that the prices strictly take into account qualitative differences. The state is also taking steps to protect small shops from unfair price competition from larger ones.

It is forbidden to sell products at prices below their cost in order to attract buyers and eliminate competitors. Wholesalers and retailers must sell products at prices that include costs and a fixed percentage of them, as well as covering overheads and profits. This applies in particular to goods such as bread, dairy products, and alcoholic beverages.

Decisions on price changes are also influenced by participants in the distribution channels from the manufacturer to wholesale and retail trade. All of them seek to increase sales and profits and establish greater control over prices. The manufacturer influences the price of goods using a system of monopoly goods movement, minimizing the sale of goods through discount stores. The manufacturer opens its own stores and controls prices in them. The wholesaler or retailer achieves a greater share in pricing by demonstrating to the manufacturer its role as a buyer of the goods, associating profit growth with the most successful and modern form of sale. She refuses to sell unprofitable products, sells the goods of competing firms, thereby placing the buyer towards the seller, and not towards the manufacturer. In some cases, trade deliberately commits actions directed against the brand of goods: it holds products, sets a higher price for it, while selling goods of other brands at lower prices. In order to reach the agreement of all participants in the distribution channel in decisions on prices, the manufacturer must: provide an appropriate share of the profit to each participant to cover his expenses and generate income; provide guarantees to wholesale and retail trade in obtaining products at the lowest prices; offer special consents, including discounts on the price for a certain period or a free lot of goods to stimulate purchases by wholesalers and retailers.

Competition is an important element influencing the price level. There are three types of competitive environments, depending on who controls the prices. An environment in which prices are controlled by the market is characterized by a high degree of competition and the similarity of goods and services. It is in this environment that it is important for a firm to set prices correctly. High prices will alienate buyers and attract them to competing firms, and reduced prices will not provide conditions for productive activity. However, it is impossible to hide a successful pricing strategy from competitors. In this regard, the management of the enterprise faces a big and difficult task - to see the prospects for the chosen pricing strategy, to prevent competition from escalating into price wars. A firm-controlled price environment is characterized by limited competition and diversity in goods and services. Under such conditions, it is easier for firms to function, receiving high profits: their products are out of competition. Both at high and low prices for their products, firms find buyers, and the choice of price depends only on the strategy and target market. The environment in which prices are controlled by the state extends to transport, communications, utilities, and a number of food products. Government organizations authorized to control prices set their level after a comprehensive study of information received from parties interested in this product - from consumers and producers. The final price of the goods depends on the costs of acquiring raw materials, labor, individual components of the goods, on the costs of transport, advertising, and environmental protection. These costs cannot be controlled by the firm, but must be factored into pricing.

1.3 Pricing steps

The pricing process can be divided into several stages:

Setting goals and objectives;

Definition of demand;

Cost analysis;

Competitor price analysis;

Choice of pricing method;

Setting the final price.

First of all, the enterprise determines what goal it pursues when releasing a particular product. If the goals and position of the product on the market are clearly defined, then setting the price for this product will be much easier. There are three main goals of pricing policy: ensuring the survival of the company, increasing profits and retaining the market (table No. 1)

Table number 1. Objectives of the company's pricing policy*

Ensuring survival is the main goal of a company that operates in a highly competitive environment, when there are many manufacturers with similar products on the market. This goal is chosen by the firm if the following conditions exist:

Price demand is elastic;

The enterprise wants to achieve maximum growth in sales and increase in total profit by some reduction in income from each unit of goods;

The firm assumes that an increase in sales will reduce the relative costs of production and distribution;

Low prices deter competitors;

There is a large consumer market.

Speaking of profit maximization, one should pay attention to the inconsistency of this goal. The assumption that producers are always trying to maximize their profits is only partly true. Considering small time periods, one can easily see that many firms do not try to maximize profits, quite content with income sufficient to recover costs and accrue "normal" dividends on shares. This is largely due to the fact that short-term profit maximization conflicts with long-term profit maximization. A medium or large firm is willing to lower current profits in order to make higher profits in the future. To do this, it needs to gain a foothold in a certain market niche, expand it if possible, constantly update fixed assets, etc. All these parameters are incompatible with a policy aimed at increasing short-term profits. The leaders of small firms, not too sure of their future, are trying to make the most of the favorable market conditions for themselves; in this case, making a profit comes first and dominates the other goals of the firm.

The goal based on profit maximization has several varieties:

Establishment by the firm for a number of years of a stable income corresponding to the size of the average profit;

Calculation of price growth, and profit due to the increase in the cost of capital investments;

The desire for a quick initial profit, as the company is not sure of a favorable development or it lacks cash.

Profit can be calculated in relative or absolute terms. Absolute profit is the income that the seller receives from the sale of all goods, minus expenses. Relative profit is the income that the seller receives from the sale of one product. Therefore, absolute profit can also be obtained as the product of relative profit by the number of units of goods sold. Different goods have different relative profits. Thus, essential goods (bread, milk, housing) have a low relative profit, and high-quality prestige items provide high relative profits. Such profits are most often based on prestigious goals. Companies that use penetration prices earn a high overall return. Choosing a goal based on profit maximization, the firm evaluates demand and costs in relation to different price levels and settles on such prices that will provide it with maximum profit in the future.

The goal, based on the retention of the market, is to maintain the existing position in the market or favorable conditions for the company to operate. The company takes all possible measures to prevent a decline in sales and intensify competition. Working in such conditions, companies carefully monitor the situation on the market: price dynamics, the emergence of new products, the actions of competitors. They do not allow excessive overpricing or underpricing of their products and strive to reduce production and marketing costs.

The next important step in price setting is the definition of demand. It cannot be skipped or postponed, since it is absolutely impossible to calculate the price without studying the demand for this product. However, it should be borne in mind that a high or low price set by the firm will not immediately affect the demand for the product.

The higher the price of a product, the lower the demand for it. But, ceteris paribus, a buyer with a limited budget will refuse to purchase a product with a high price if he is offered alternative products at a lower price. However, this ratio will be different when it comes to the sale of prestigious goods. In practice, there are many examples that consumers of prestigious goods believe that the increase in prices is due to the improvement in the quality of these goods, their conformity to fashion; as a result, demand is growing. But when the price is too high, the level of demand is lower. No firm can ignore a change in demand. Differences in approaches to the definition are associated with differences in the types of markets. In a pure monopoly market, where there is only one seller, demand will depend inversely on price, and with the advent of competitors, the demand for the goods of the monopoly seller will change under the influence of the pricing policy of other firms. Determining the magnitude of demand for its products, the company must evaluate it at different prices and try to find out the reasons for its change.

As already mentioned, the magnitude of demand is influenced by various factors, among which are the need for a product, the absence of a replacement or competitors, the solvency of potential buyers, buying habits and preferences, etc. When adjusting the price of a product to demand, it should be remembered that demand reacts differently to price. The degree of sensitivity of demand to prices shows the coefficient of elasticity of demand. When determining demand, an entrepreneur must necessarily take into account the value of this coefficient.

Cost analysis. Demand for a product determines the upper price level set by the firm. Gross production costs (the sum of fixed and variable costs) determine the minimum price. This is important to take into account when lowering the price, when there is a real threat of losses due to the fact that the price level is set below the cost level. Such a policy can be carried out by the firm only in a short period when penetrating the market. Frequent price changes based on fluctuations in demand and costs are indicative of a poorly thought out pricing policy. It is advisable to take into account the costs according to the standards.

The next step is competitor analysis. The behavior of competitors and the prices of their products have a great influence on the price. Each firm must know the prices of competitors' products and the distinctive features of their products. For this purpose, marketing research of the offer on the market of goods of competing firms and their purchases are ordered. Then a comparative analysis of prices, goods and their quality from competitors and this company is carried out. The firm can use the information received as a starting point for pricing and determining its place among competitors.

Choosing a pricing method and setting the final price. "The formation of the final price level occurs in the sphere of product sales, that is, in the market, the price is always a market value" *

Having passed all these stages, the company proceeds to determine the price of the goods. The most possible optimal price should fully reimburse all costs for the production, distribution and sale of goods, and also ensure a certain rate of profit. There are three options for setting the price level. This is the minimum level determined by the costs, but making a profit at too low a price is not possible. The maximum level formed by demand, at this level it is impossible to achieve constant and sustainable demand. The latter is the best possible price level, which takes into account the cost of production, the prices of competitors and the prices of substitute products, plus the unique advantages of the product.

Chapter 2. Pricing Methods in a Market Economy

2.1 Pricing methodology

"Pricing methodology is a set of general rules, principles and methods. Namely: development of a pricing concept, determination and justification of prices, formation of a pricing system, pricing management."

The methodology is the same for all levels of pricing, which means that the main provisions and rules for pricing do not change regardless of who sets prices and for how long. This is a necessary prerequisite for the creation of a unified price system. But it is impossible to put an equal sign between methodology and technique. They differ significantly from each other: on the basis of the methodology, a pricing strategy is developed, and the methods contain specific recommendations and tools (tools) for implementing this strategy in practice. It follows that the methods are the constituent elements of the methodology that combine a number of pricing methods. There is, for example, a method for determining prices for new types of products, a method for taking into account the natural-geographical factor in pricing, etc. Existing methods differ depending on management levels, types of prices and product groups. Each technique has its own characteristics. But these features and differences should not go beyond the requirements of a unified methodology. Thus, methods are the first essential element of methodology. The second important component of the methodology are the principles of pricing. The principles of pricing can be implemented only on the basis of the development and application of appropriate methods (techniques). Therefore, the principles and methods are closely related and form a methodology. During the transition to the market, the pricing methodology should remain the same, which will make it possible to gradually form a price system that is adequate to market relations according to uniform principles and rules. Pricing principles are permanent basic provisions that are characteristic of the entire price system and underlie it.

2.2 Pricing methods

After carrying out preliminary operations, the enterprise proceeds to the choice of the pricing method. Calculations of the assumed base price are carried out by applying various methods, although the final price level is determined by the market. The price calculated by any method is a preliminary value that allows the company to assess the situation, and in the future the price level is adjusted taking into account discounts, surcharges, the current taxation system and inflationary processes.

The choice of a specific methodology depends on what goals the organization has set for itself, what are the market situation and consumer characteristics of the goods produced and sold. Each of the pricing methods has its advantages and disadvantages and affects the price level in different ways. Shevchuk D.A. identifies the main pricing methods that are used in the practice of market pricing and divides them into four groups: cost-oriented methods, methods focused on consumer demand, parametric methods and methods focused on a competitive environment.

"Methods based on cost accounting reflect a focus on sellers, are traditional and quite common, due to the availability of the necessary information from enterprises, ease of calculation, the ability to determine the lower price limit that allows reimbursement of expenses incurred. However, they have disadvantages: the level of demand is not taken into account and a situation may arise when, due to the high price, the goods will not be sold; the "costly" price does not reflect the measure of the value of the goods for buyers; the influence of competitors' prices and their behavior is ignored" * .

There are five cost-based pricing options that can be conditionally distinguished:

Based on full costs ("costs +");

Based on marginal costs (marginal cost, reduced cost, direct costs);

based on turnover;

Based on return on investment;

Taking into account breakeven.

When applying the first two methods, the costs can be both actual and normative (standard).

The full cost method implies that the price is based on all the actual costs of the enterprise for the production and sale of products (fixed and variable), that is, the full cost of goods is calculated, and the amount of profit is added to it. Since fixed costs are distributed among all types of products in proportion to some indicator, with different methods of distribution, depending on the choice of base, the level of the cost of the product also fluctuates. As a result, one more disadvantage is added to the listed disadvantages of this method - the actual cost of the product is distorted, and this leads to an underestimation or overestimation of the price. In fact, many retailers also use this technique. More progressive and justified is the method of standard (normative) full costs. Its essence lies in the fact that the price is based not on actual, but on standard costs, and the deviation of actual costs from the norms is constantly taken into account. This pricing method has a number of advantages over simple cost accounting. It makes it possible to manage costs, since it is not just the total deviation that is calculated, but in the context of each article. Also, this method allows you to perform a factor analysis of cost items and identify, due to which the price deviated from the standard, and provides the ability to continuously compare cost items with financial results, regardless of changes in capacity utilization. This method directs manufacturers to reduce costs. The most difficult moment when introducing a system of standard (standard) costs is the determination of progressive and reasonable cost rates, which involves a detailed study of production methods, technical characteristics of products, etc.

The marginal cost method involves taking into account in the price of production only those costs that arise with the release of each additional unit of output in excess of the already mastered production. These costs in the economic literature are called differently: marginal, marginal, reduced, direct, and in practice they are usually considered variable costs. The application of this method is based on the principle of marginal profit, due to which fixed costs are reimbursed. The marginal cost method is more complex than the total cost method, as it focuses on a multi-factor approach to pricing. If it is used, the enterprise must estimate the potential sales volume at each assumed price. It is used in various situations. If the company has free production capacity and fixed costs are already covered by the current production volume. In this case, in order to expand the volume of sales, the company can go for the formation of prices, taking into account only variable costs. If an enterprise needs to gain market share, and it intends to use a price penetration strategy, that is, the price of its product is set lower than the price of a similar product, in this case it must be taken into account that it is impossible to use this method for a long time, because ultimately must recover all costs and make a profit. The enterprise must have financial resources to keep the prices of its products at this level, or this method is used only when determining the price of several types of manufactured goods. Its most effective use in making managerial decisions:

On the price of products with available free production capacity;

On the acceptance of an order from the state or another enterprise with guaranteed sales; produce or purchase components;

On the expediency of producing a particular product with limited production capabilities.

The income-based pricing method also involves taking into account the full costs of the enterprise. In addition, he must provide him with the planned (desired) amount of income from turnover. In trade, distribution costs will be reimbursed from gross income, and this must be taken into account when determining the size of the desired level of income from turnover. The calculations made will help trade enterprises to justify prices taking into account their needs. The price determined by this method can serve as a guide, i.e. allows you to compare the price level with the prices of competitors. If it is too high, then it is necessary to look for ways to reduce costs or new supply channels with lower purchase prices of goods in order to provide the desired level of income.

The method of return on investment (return on invested capital) is used when pricing new products, the production and sale of which require capital investment. This method is the only method that takes into account the payment of financial resources. In trading activities, it can be used to determine the minimum price when using credit to purchase a consignment of goods. The calculation allows the retailer to compare the minimum and retail price with the level of market prices for similar goods and determine whether the products will be in demand at this price and whether it makes sense to purchase them under such conditions. In addition, the use of this method allows you to make informed decisions about the amount of production volumes or batches of goods at known market prices, because the amount of payments for the use of credit per unit of product (goods) depends on the scale of activity. In inflationary conditions, it is difficult to use this method due to the high level of interest rates and their uncertainty over time, as well as the difficulty of predicting the level of market prices.

The method of break-even analysis and determining the target profit cannot be called a price determination method, in fact, it is the calculation of various options for the volume of production or trading activities, allowing to achieve break-even and get the target (planned) profit at certain costs and different prices. Calculations are based on the idea that with the achievement of a certain scale of production and trade activities, the enterprise covers all its costs (fixed and variable) and, with a further increase in volume, begins to make a profit. In the economic literature, this volume of production and trading activity is called the break-even point, the profitability threshold, the threshold sales volume, the turning point, etc. At the break-even point, the proceeds from the sale of products cover the costs of the enterprise. The break-even point can be determined analytically or graphically. The break-even point depends on the amount of costs (the ratio between fixed and variable) and the price: the higher the price, the less production provides break-even at constant costs. The basis of the break-even analysis is the search for the most profitable combinations between variable costs per unit of product, fixed costs, price and production volume. To determine prices in order to achieve break-even production, an estimated sales volume standard is used, which itself depends on price. Analysis of the break-even of an organization's activities has its own specifics - in trade and catering, costs are covered by gross income, therefore, when calculating the break-even of trading activities, an indicator of the level of gross income is used, depending on the turnover and the level of the trade margin. Break-even trading company shows the volume of trade at which the company covers costs. The level of gross income depends on the level of the trade allowance, with different options for the trade allowance, its size and the amount of gross income will fluctuate, respectively, the price and volume of trade necessary to achieve breakeven. Thus, using the planned data, it is possible to carry out interconnected calculations of the main indicators. The listed cost-based pricing methods are mainly used as preliminary calculations to determine how appropriate it is to enter the market with such a product price.

Pricing based on consumer demand. Many experts believe that demand is the only factor that should be taken into account when justifying a price. Companies that follow this approach to pricing use the consumer evaluation method, which is based on the perceived importance of the product by the consumer and the willingness to pay a certain amount of money for it, i.e. consumer assessment of the product to potential buyers and its perception of the price. With this approach, the company proceeds from the fact that the consumer himself determines the ratio between the value of the product for him personally and its price, comparing with the prices of similar products on the market. The usefulness of a product (a set of useful properties of systemic quality) for the consumer predetermines his willingness to pay a given price, i.e. maintain the level of effective demand. The change in price is made dependent on the change in the level of demand for the product in such a way that the price increases with an increase in demand and decreases with its decrease, and the costs of production (sales) are taken into account only as a limiting factor showing whether the product at a price determined by this method can bring to the enterprise profit. The use of this method is effective in the market of interchangeable goods, which allows the buyer to compare products and choose the one that best suits his desires. The task of the enterprise is to differentiate its products based on technical properties, design, packaging, after-sales service, etc. and draw the attention of potential buyers to these qualities. The application of this method requires a good knowledge of your potential customer, his needs, as well as competitors' products. Product differentiation also implies market differentiation: the company works with several consumer segments, each of which evaluates individual consumer properties of the product differently, which implies a wide range of prices.

Parametric pricing methods are based on determining the quantitative relationship between prices and the main consumer properties of the product included in the parametric range. A parametric range is a group of products that are homogeneous in terms of functionality, design, manufacturing technology, but have differences in consumer characteristics (for example, for refrigerators, these are power, dimensions, freezer volume, energy intensity, etc.). These methods are used to justify prices for new products, as well as to determine whether the level of the estimated price, calculated on the basis of production costs, corresponds to the prices prevailing in the market. Such pricing methods include the method of comparing specific indicators, the method of scoring parametric estimates, the method of correlation and regression analysis, and the aggregate method.

The method of comparing specific indicators is used to calculate the price of goods, the consumer value of which is characterized by one main consumer parameter (power, productivity, weight, service life, etc.). This method is the simplest, and is applicable to such products where any one or two parameters matter, and other characteristics of the product are approximately the same.

Method of scoring parametric estimates. The product that the company is going to sell on the market is evaluated according to the parameters that are important for consumers (material, design, accessories, fashion, etc.), and each parameter is assigned a ranking number according to significance: 1, 2, etc. Specialists set a weight index (%) for each product depending on the significance, and the total sum of the weight indices is 100%, and evaluate their product and competitors' products on a 10-point system. Multiplying the score by the weight index, and dividing by 100, each parameter score is obtained, the sum of these parametric scores gives the overall parametric score of the product. Choosing a product of any company as a reference (a product that is best sold on the market, which indicates the conformity of price and quality) and, taking the total score received by him as 100%, determine the estimated percentage of other products.

The essence of the method of "correlation regression analysis" is to determine the dependence of price changes on changes in several basic quality parameters within the parametric range of goods. To build a function, they make up a parametric series, i.e. accumulate initial information about prices and quality characteristics (parameters) of goods. After statistical processing of the initial data by the method of correlation-regression analysis, a quantitative relationship is found between the price change and the change in parameters and a regression relationship equation is built. This method can be successfully applied in a market economy, especially for complex products with a large parametric range, as it allows you to identify the dependence of the price on many factors, i.e. a more reasonable approach to determining its level.

The aggregate method consists in summing up the prices of individual structural parts of products included in the parametric series, with the addition of the cost of new parts and standard profit.

Pricing methods focused on the competitive environment are used by enterprises operating in the market of pure or oligopolistic competition. There are three methods for determining prices: the method of current prices, the method of following the leader of the competition and the tender method.

The mark-to-market method is used by businesses that rely solely on competition and charge prices slightly higher or lower than competitors and is considered to reflect the collective wisdom of the industry. This method is used in a market where homogeneous goods are sold in conditions of pure competition. Under these conditions, it is not possible to sell goods at a higher price; at the same time, it is not necessary to set a lower price, since goods can be sold at this market-acceptable price. A distinctive feature of enterprises that apply this approach to pricing is that they do not seek to maintain a constant relationship between prices and costs or the level of demand - the enterprise will change the price of a product only when competitors change their prices. The main task in these conditions is to control their own costs. This pricing can be resorted to by enterprises that find it difficult to determine their own costs per unit of production and consider the average prices formed on the market as the basis for their own, so they get rid of the risk of setting a price that the market will not accept.

The method of following the leader of the competition is used in an oligopolistic market where a limited number of sellers operate. As a rule, these enterprises tend to sell their goods at the same or close price, because each of them is well aware of the prices of their competitors. The price level in this market is determined by the goals set by the companies that dominate the market, or by an unspoken agreement between participants. Under these conditions, smaller enterprises follow the price leader, allowing themselves only small price discounts. In such a market, prices change from time to time, following changes in production costs. In this case, one of the enterprises takes on the role of leader, raising or lowering the prices of its goods, and all the others do the same. This method is used if it is difficult for an entrepreneur to predict his own costs, demand or the reaction of competitors - the most reasonable in such a situation is to follow the competitive leader.

The tender method, or the method of closed tenders, is specific and is used in the case of a struggle between several enterprises for the right to obtain a contract (for construction, development of natural resource deposits, supply of industrial and technical products, etc.). The goal of firms is to get a contract and push competitors aside. To implement it, it is necessary to take into account and identify competitors: the higher the price, the lower the probability of receiving an order, and vice versa. Thus, when bidding, the firm proceeds from the prices that competitors can offer, and not from the level of its own costs or the magnitude of demand.

"Some experts believe that the level of demand may be the only factor that should be taken into account when determining prices. With such an approach to determining the price of its product, the company proceeds from the position that the consumer independently evaluates the value of the product (service), taking into account the main and additional (e.g., psychological) advantages of the product compared to similar products on the market, the level and quality of after-sales service by the company of the product, etc. and, taking into account these circumstances, determines the relationship between the evaluation of the usefulness of the product and its price.The main factor in this method is not the cost the seller, but consumer perception, which allows the buyer to choose the best product from the point of view of price and quality from the entire range offered, taking into account that purchasing an expensive product can sometimes be more expedient than buying a cheaper analogue" * .

Esipov V.E. identifies the following methods of market pricing:

Current price method. Applied when costs are difficult to quantify, some firms believe that the current price method, or the price usually received for a product in the market, is the result of a joint optimal decision of enterprises in this industry. The use of the current price method is especially attractive to those firms that want to follow the leader. This method is used primarily in markets for homogeneous goods, since a firm selling homogeneous goods in a highly competitive market has limited ability to influence prices. Under these conditions, the main task of the company is to control costs. In an oligopoly, firms also try to sell their goods at a uniform price.

The "sealed envelope" or tender pricing method is used in industries where several companies are in serious competition for a particular contract. When determining the tender proceed from the prices that competitors can charge, and the price is determined at a lower level compared to them. However, if a product has some qualities that distinguish it from competing products, or is perceived by buyers as a different product, the price for it can be assigned flexibly, without paying attention to competitors' prices. To set prices taking into account demand, it is necessary to constantly study the market, investigate the relationship between prices and demand in the form of demand-price functions and demand-price elasticity coefficients, analyze data from previous periods, the results of an experiment with different prices, study expected situations for buying goods on the market or intention to buy them. At the same time, it should be borne in mind that it is necessary to carefully extrapolate the demand for a product for the future. When conducting an experiment with prices, it must be taken into account that if a product with low prices appears on the market, it will be quite difficult to introduce a similar product at a higher price to the market.

A method of determining prices, focused on finding a balance between production costs and market conditions. This method can be divided into steps. First, a sales plan is determined, according to which production costs are calculated. To make the right pricing decision, the cost structure (fixed and variable) should be defined in as much detail as possible, since this information can be used to calculate based on variable costs, which are an important tool in deciding on the price level. Further, based on the study of demand, the level and ratio of prices for similar types of products manufactured by the company and competitors, the planned price and the corresponding profit are determined, which will begin to flow only after reimbursement of fixed costs. Then, based on the demand function, various sales tactics are worked out by analyzing various combinations of "price-sales volume" and the one that provides marginal profit (the difference between revenue and variable costs) is selected. At the same time, one must be sure that the planned sales volumes at various prices will correspond to real conditions. At this stage, the choice of price is preliminary, since when calculating sales volumes, it is necessary to take into account the actions of competitors and the real capacity of the market. At the next stage, an assessment is made of the strength of the position of the product and the reputation of the company in the market, as well as an assessment of the competitiveness of this product in terms of the technical and economic parameters of the product using parametric methods and it is determined to what extent the price level calculated on the basis of production costs fits into the scale of market prices for similar products. products (higher or lower, taking into account real parameters). Next, the "indifferent price" is determined, that is, the price at which the buyer will be indifferent to which product to purchase: this or a competitor product. This is done through a set level of markup (or discount) on the price, which will exactly match the difference in valuation of the parameters of this product compared to competitive models. And finally, the set price is adjusted in accordance with the requirements to ensure a given level of profit and the current market situation. It may be necessary to work out various combinations of "price-sales volume", but always taking into account the competitive factors identified in the previous stages. After that, a combination is selected that fits into the scale of market prices, corresponds to the position of the company in the market and provides the maximum profit under the given conditions. At the same time, special attention should be paid to answering the question about the possible actions of competitors. At the same time, it must be borne in mind that the manufacturer must provide a certain price ratio not only in relation to the products of competitors, but also to other products of this company. It is necessary to set its own price for each of the assortment models, taking into account the fact that buyers are divided into groups depending on the level of their requirements, and each market segment has its own unique elasticity of demand.

The competitive pricing method is considered to be safer. With this method, the price does not change even when costs or the level of demand change, just because competitors do not change their prices either. At the same time, as soon as competitors change prices, the firm changes the prices of its product, although costs and demand remain unchanged. This method is preferred by firms that find it difficult to determine their own costs and consider current prices as the basis for determining the prices of their goods. This avoids the risk associated with setting your own price. In conditions of strong competition, the firm's reaction to changes in competitors' prices should be prompt. For these purposes, the firm must have a pre-arranged program that promotes the adoption of a counter-strategy in relation to the price situation created by the competitor.

Conclusion

Establishing the final price level is the most crucial moment in the field of pricing. An enterprise must take into account a number of aspects. For example, the psychological perception of price by buyers, its role is important because buyers often link price with such an indicator of a product as its quality, and may prefer a more expensive product as better and more prestigious. One of the common techniques is setting a "psychological" price - a fractional or non-circular figure, for example, not 300, but 299. The buyer perceives it as more reasonable and closer not to 300 m, but to 200 m. These features are important when setting prices for new goods , and if a price decision is made about goods already on the market, then the reaction to a price change must be taken into account, because its increase or decrease can be perceived by consumers in different ways, and it is not at all necessary that a decrease in price will cause an increase in demand, and an increase - a decrease. Buyers may perceive a decrease in the price level as the presence of shortcomings, flaws in the product, its obsolescence. In this case, instead of the expected growth in sales, it may decrease. An increase in price, on the contrary, can be regarded as the fact that this product is in demand and must be purchased while it is not very expensive, which will lead to a rush of demand and a sharp increase in sales. It is also necessary to take into account the reaction of competitors. They can take the same actions, ie. raise or lower prices, or may not perceive the actions of the enterprise. Therefore, it is very important to predict their behavior, because. if they take the same measures, then it makes no sense for the company to change prices, this will negatively affect the economic performance. The business must be aware of and aware of the laws relating to pricing and be confident in the legality of its actions. An integral part of the pricing process is a system of discounts applied when setting the final price. The discount is the share of the final sale price received by the company that provided this sale. The main purpose of discounts is to stimulate sales, reduce storage costs, attract new customers and retain regular customers, and respond to competitors' price cuts. Inflationary expectations may affect the final price setting. The anticipated rise in prices may encourage entrepreneurs to price higher levels of profitability. This is because entrepreneurs are waiting for the increase in the cost of resources, which will require large investments in the future, and are trying to create a reserve of funds. The same is happening in trade (wholesale and retail) - assuming higher purchase prices, they raise prices now to increase the margin of financial safety. Thus, the expectation of rising prices spurs this growth already at the moment, inflation, as it were, stimulates itself, which has a negative impact on economic processes. However, in the context of inflation, an enterprise must take into account and evaluate inflationary expectations to justify prices for products and goods, i.e. actual market conditions.

List of used literature

Abryutina M.S. Pricing in a market economy. Business and service. 2002 256s.

Algazina Yu. G., Belyaev V. V., Butakova M. M., Poroshina E. E. Workshop on pricing. KnoRus., 2009. 296 p.

Gerasimenko V.V. Pricing. textbook Benefit. M. INFRA-M. 2007 422 p.

Esipov V.E. Prices and pricing: A textbook for universities, 3rd ed. St. Petersburg: Publishing house "Peter", 1999. 464 p.

Zheltyakova I. A., Makhovikova G. A., Puzynya N. Yu. Prices and pricing. Short course / Study guide. - St. Petersburg: Publishing house "Peter", 1999.- 112p.

Kulomzina E. Yu., Magomedov M. D., Chaikina I.I. Pricing. Dashkov and Co., 2009. 256 p.

Lysova N. A., Cherneva L. F. Price management. KnoRus., 2010 240 p.

Punin. E.I. Pricing and market: Per. from English / Common. Ed. And foreword. E.I. Punin and S.B. Rychkov. – M.: Progress, 1992. - 320s.

Salimzhanova I.K. Prices and pricing: A textbook for universities. M.: CJSC "Finstatinform", 2001. - 304 p.

Slepnev. T.A. Prices and pricing. M. Infra-M, 2001. 200s.

ChudakovA. D. Prices and pricing. Textbook for high schools. RDL. 2002 376 p.

Shevchuk D.A. Pricing. studies. Benefit. M. GrossMediaROSBUKH. 2008. 240 p.

Pricing methods are used as part of a pricing strategy and allow you to narrow down the search field for the most acceptable price. There are pricing methods based on costs, marketing research, parametric, etc.

Costly pricing methods

These include full cost method total costs are added to the amount of profit, determined through the rate of return

where C is the total cost of production; LGD - rate of return.

The firm seeks to set a price that will provide it with the desired amount of profit.

The disadvantages of this method include the fact that the behavior of competitors and the elasticity of demand are not taken into account. Currently used in markets with imperfect competition. A variation of the full cost method of pricing based on return on investment (method of return on investment). The price is calculated using the same formula, and the rate of return is based on the cost of borrowed funds.

Methods of marketing evaluations

The essence of such methods is the study of sales markets, the behavior of competitors, the assessment of the elasticity of demand depending on price changes, etc. Setting the price level in the market conditions consists in finding a price that would represent the optimal balance between what the buyer would like to pay for a given product and the costs of the firm in its manufacture. Therefore, when determining the price, factors related to demand should be mainly taken into account, i.e. to an assessment of how much the buyer is able and willing to pay for the product offered to him. As a rule, an enterprise first of all tries to establish at what price it could sell its product on the market based on the nature of demand, competition, product quality, etc., and then to identify its production, commercial and administrative costs corresponding to such price and changing depending on market conditions.

Consider pricing methods based on marketing research.

Similar (similar) price method - the price is determined in accordance with the prices of competitors for a similar product. When setting prices, the adviser may be the price level for similar goods and services. You should pay attention to the prices of analogues of the goods sold in stores, supermarkets, wholesale warehouses, discount stores, catalogs for ordering goods by mail and other possible outlets. If necessary, you can analyze what materials the analogues are made of, what is their quality. The high price is usually justified by high quality materials, great design, etc. In this case, a high price is assigned and a discount is given.

Current price method. The use of this method is especially attractive for those companies that want to follow the leader. Under these conditions, the main task of the company is cost control.

This method is used primarily in markets for homogeneous products, since a company selling homogeneous products in a highly competitive market has limited ability to influence the chains. By setting a price based on the level of current prices, the company is based on the prices of competitors and pays less attention to indicators of its own costs or demand. Smaller firms "follow the leader" by changing prices when the market leader changes them, rather than depending on fluctuations in demand for their products or changes in their own costs.

The pricing method based on the level of current prices is quite popular in the competitive market for homogeneous products, it is the result of a joint optimal decision of enterprises in this industry. In cases where the elasticity of demand is difficult to measure, it seems to companies that the level of current prices represents the collective wisdom of the industry, the guarantee of a fair rate of return. And besides, they feel that sticking to the level of current prices means maintaining a normal balance within the industry.

In an oligopoly, all companies tend to sell their products at the same price.

Buyer reaction evaluation method - demand based pricing. The seller finds out and sets the maximum price at which the goods will be sold. The essence of this approach to pricing is that it is required to set the price that the buyer is willing to pay for this product. The main difficulty in pricing by demand is that the price must be the one that the buyer will pay, but it is up to the seller to set it. Thus, in demand pricing, the price is set based on the cost of production and sales, and rises to the amount that, in the opinion of the seller, the buyer is willing to pay.

Setting a price based on the perceived value of a product. Firms base their pricing on the consumer's perception of the value of their products. To form in the minds of consumers an idea of ​​the value of a product, they use non-price methods of influencing buyers in their marketing mixes. The chain in this case is designed to correspond to the perceived value of the product.

A company that uses a pricing method based on the perceived value of a product needs to identify what value perceptions are in the minds of consumers about competitors' products. For example, a cup of coffee and a cake in a cafe will cost much more than in a canteen. How much more are consumers willing to pay for the same coffee and cake in different settings? If the seller asks for a higher value of the product recognized by the buyer, the company's sales will be lower than it could be. At too low prices, these goods sell well on the market, but bring less profit to the company than they could at a price raised to the level of their value in the minds of buyers.

Parametric methods

When it is necessary to determine prices for new products that do not have complete analogues in the market, it is recommended to use unit price method, based on calculating the base value of the old product and comparing it with that of the new product. The formula for calculating by this method has the form

where Cn is the new price; Cb - base chain; Pm, II- - new and basic indicators, respectively. The base indicator can be one of the main parameters of the quality of the goods.

Price setting based on closed auctions

Competitive pricing is also used in cases where firms fight for contracts during tenders. In such situations, when assigning its price, the company is repelled by the expected price offers of competitors. She wants to win the contract, and for this she needs to ask for a price lower than others. However, this price cannot be lower than the cost, otherwise the company will inflict financial damage on itself.

When choosing a pricing method, one should take into account both internal restrictions (costs and profits) and external ones (purchasing power, prices of competitors' goods, etc.). No pricing method will give an exact answer to the question of what should be the price of a particular product. The purpose of applying the methods is to narrow the range of searches for the final price.

Pricing methods and strategies give direction to the search for prices and allow you to highlight the boundaries in which an acceptable price is located. In this space narrowed by pricing strategies and methods, the firm determines the final price for a particular product in a particular period of time, taking into account the psychology and possible reaction of consumers, predicting the actions of competitors and the government.

Definition of the term pricing

Target pricing

Methods pricing

Theoretical aspects of pricing management in the enterprise

Concept, types of prices and their classification

Main Factors Affecting Pricing

Relationship prices and finance

Pricing management for enterprise

pricing policy and process pricing for enterprise

Pricing methods for enterprise products

Perfection process establishing prices for products

Pricing: Survival Strategies

Pricing Strategies in Market Analysis

Pricing Strategies: You Can't Cheat, You Can't Sell

Definition of the term pricing

Pricing is setting prices, choosing the final price depending on the initial cost of the product, competitors' prices, the balance of supply and demand and other factors.

Pricing - setting prices, the process of choosing the final price depending on initial cost products, competitor prices, demand ratio and suggestions and other factors. The main approaches to setting prices:

On the basis of closed auctions, based on the expected price offers of competitors;

Based on perceived value, based on the consumer's perception of the value of the product;

Based on the level of current prices, based on the current prices of competitors.

Purpose of pricing. Provide a motivated, timely and sufficient price response in such a way as to obtain the maximum sales volume with a minimum loss of margin.

You need to understand that the pricing of one or another goods always depends on the goals set by the organization. And the goals are very different:

Survival organizations. Those. it is necessary to set such a price for product, which will allow firms survive in the competition. It is obvious that such situations do not come from a good life;

Profit maximization;

Market expansion marketing;

Product positioning for a specific niche. For example, if it is luxury, then it may not always be justifiably overpriced, if we talk about the cost of its manufacture;

Stimulation marketing;

Expansion of the market share;

These are not all goals. If desired, this list can be seriously expanded. After all, all companies have their own goals at one time or another.

Pricing Methods. So, here are the main pricing methods:

1) Based on costs

This method is one of the most understandable and well-known. In this case, the price of the product is determined by expenses for its production. Those. The cost of the product should cover the costs of producing the product and at the same time bring the organization a certain profit.

It is obvious that a serious advantage in such an advantage will be received by one that will be able to minimize its costs. Indeed, in this case, it will be able to set lower prices for its products or receive more profit. Finally, many believe that this method is fairly transparent and fair to end-users of products who do not pay for air.

Naturally, this method also has certain problems:

In some cases, it may be difficult enough to calculate the cost of producing a good in order to establish its value;

If competitors have lower costs, then the firm will have serious problems;

Costs may change. Consequently, the price of the commodity will also jump;

2) With an eye on competitors

In this case, the price of the product is set on the basis of competitors' prices. One of the most popular methods is industry average pricing, which calculates the average price of a product between its most expensive and cheapest counterparts. Finally, the price can be set both higher than that of competitors, and lower. It all depends on how the organization wants to position its product on the market. market what goals it pursues.

Of course, even using this pricing method, one should not forget about the costs, so that there is no situation when the price of the product will be set simply from the ceiling, while the costs will not allow it to be sold at such a price. It will simply not benefit the organization.

3) For product positioning purposes

In this case, the price is set in such a way as to emphasize the advantages of the product, its positioning. For example, if the goal is to make a product expensive and position it as a luxury product, then you need to set a high price. If the company, on the contrary, wants to position the product as affordable, it is necessary to set the lowest possible price.

4) Based on demand

Everything is logical here. If the demand for a product goes off scale, then the price can be raised. If there is no demand, then it must be lowered. Naturally, you can try to calculate all this in advance with the help of marketing research.

It is also possible to single out non-basic methods, such as: the cost method; market method of consumer evaluation; market method of following the leader; auction method; tender method; parametric method; method of specific indicators; method of structural analogy; aggregate method; scoring method; method of correlation-regression analysis.

Theoretical aspects of pricing management in the enterprise

The concept, types of prices and their classification. Specific pricing opportunities largely determine the company's financial policy. The price is an object of intense competition, the results of which largely determine the financial results of market activity, which significantly increases the responsibility of the company's management for the quality of business decisions that are somehow directly or indirectly related to price management. As you know, the price is an economic category, meaning the amount of money for which he wants to sell, and buyer ready to buy a product. The price of a certain quantity of a product is its value, hence the price is the monetary value of the product.

According to N.L. Zaitsev, the price is an economic category that makes it possible to indirectly measure the socially necessary labor time spent on the production of a product. In commodity relations, the price acts as a link between the producer and the consumer, that is, it is a mechanism that ensures the balance between supply and demand, and, consequently, between price and value.

Price is a complex economic category. It focuses almost all the main economic relations in society. First of all, this applies to the production and sale of goods, the formation of their value, as well as the creation, distribution and use of cash savings. Price mediates all commodity-money relations.

Pricing is the process of setting prices for goods and services. Two main pricing systems are characteristic: market pricing, which operates on the basis of the interaction of demand and suggestions, and centralized state pricing - the formation of prices by government agencies. At the same time, within the framework of cost pricing, the costs of production and distribution are laid in the basis of price formation.

The price system characterizes the interconnection and relationship of different types of prices, consists of blocks, which are considered as specific prices, as well as certain groups of prices.

The first and most important sign of the classification of prices is their service in accordance with the serviced sphere of commodity circulation.

Depending on this sign, prices are divided into the following main types:

1) wholesale prices for industrial products are divided into 2 subspecies: wholesale price of an enterprise - the price at which it sells manufactured products to other enterprises; Wholesale price industry- the price at which the enterprise pays for its products to supply and marketing organizations;

2) prices for construction products. Construction products are evaluated according to three types of prices: estimated cost - the marginal size of the costs for the construction of each object; list price - the average estimated cost of a unit of the final product of a typical construction object; contractual price - the price established under the contract between customers and contractors;

3) purchase prices for agricultural products - prices (wholesale) at which agricultural products are sold by farmers;

4) tariffs for freight and passenger transport - payment for the movement of goods and passengers, collected by transport organizations from consignors of goods and the population;

5) retail prices - prices at which trading firms sell products to the population;

6) tariffs for communal and household services provided to the population;

Prices serving the foreign trade turnover (export and import prices). Sergeev I.V. distinguishes a similar classification of prices depending on turnover. in the textbook "Enterprise Economics".

Zaitsev N.L. Depending on the nature of the serviced turnover, it distinguishes three main types of prices for industrial products.

The wholesale price of the enterprise is the price that provides for the reimbursement of current costs and profit. The wholesale price of an enterprise plays an important role in the economic activity of an industrial enterprise, since provides him with the reimbursement of current production costs and the receipt of standard net profit.

Copt. previous = Cn (1 + Rcc),

where Sp is the total planned original cost units of production of the enterprise, rub.

Rcc - the level of profitability, calculated at the initial cost, i.e. this is the amount of profit received from the sale of the annual volume of products attributable to 1 ruble of annual current expenses, which can be determined by the formula:

Rcc = (Rpr *PFsr) eSpr,

where Rpr is the level of profitability of an industrial enterprise in fractions of a unit;

PFcr is the average annual cost of production assets, i.e. the amount of fixed and working capital;

Сpr is the total planned initial cost of the annual volume of manufactured and sold products.

Wholesale price industry is formed on the basis of the wholesale price of the enterprise and the additional inclusion in the price of the subject of trade, the profit of sales organizations and value added tax:

Industr.opt.=Ind.opt. pred.+(Co.p.- MZ) * VAT + PRsb + TZsb,

where MZ is the actual or planned initial cost of material costs per unit of output;

PRsb, TZsb - and expenses of marketing organizations.

The state retail price is the final price at which consumer goods and some tools and objects of labor are sold through the trading network. It represents the wholesale price of the industry plus the value of the costs of trade organizations and the size of the planned profit. It reflects the process of increasing socially necessary expenditures at all successive stages of the production of goods:

Tsr \u003d Tsopt.prom. + T3r + Pr.,

where TZr, Pr. - current expenses and profit of retail trade organizations.

Depending on the scope of regulation, there are:

1) free prices, which are set by producers of products and services on the basis of supply and demand;

2) contract prices established by agreement of the parties;

3) prices under conditions of partial or complete monopolization market, which force one or both parties to accept some kind of coercive conditions;

4) regulated prices by agreementpan> prices established under the control of states or individual subjects of the Federation. There are direct and indirect methods of regulation. Direct regulation is carried out by setting fixed prices, marginal prices, allowances, marginal price change coefficients, marginal levels of profitability. Indirect regulation involves the impact on prices through a change taxes and interest rates.

Depending on the territory of action, there are:

1) prices, uniform for country or waist;

2) regional prices (zonal, local).

Uniform, or belt, prices can only be set for basic types of products for which prices are regulated (fixed) by state bodies (rent, rent, and alloys, etc.).

Regional prices can be wholesale, purchase, retail. They are minted by enterprises, pricing bodies of regional authorities and administrations (prices and tariffs for the vast majority of housing and communal and personal services).

According to the method of establishing fixation, there are:

Encyclopedia of the investor. 2013 .

Synonyms:

See what "Pricing" is in other dictionaries:

pricing- pricing... Spelling Dictionary

pricing- The process of pricing goods and pricing systems in general. On the free market, the process of c. occurs spontaneously, prices are formed under the influence of supply and demand in a competitive environment. … … Technical Translator's Handbook

PRICING- the process of formation, formation of prices for goods and services, characterized primarily by methods, methods of setting prices in general, relating to all goods. There are two main pricing systems: market pricing based on ... ... Economic dictionary

Pricing- setting prices, the process of choosing the final price depending on the cost of production, prices of competitors, the ratio of supply and demand and other factors. The main approaches to setting prices: based on closed tenders, based on ... ... Financial vocabulary

Pricing Methods- methods used in the formation of prices for products and services. There are several pricing methods: cost-based, buyer-line-based, competitor-based, etc.

An important component of marketing is the formation of a pricing policy in relation to the goods and services promoted to the market.

The price has been and remains the most important criterion for making consumer decisions. For a state with a low standard of living, for the poor, as well as in relation to consumer goods, this is typical. But recently, other, non-price factors of competition have been widely developed. Nevertheless, the price retains its position as a traditional element of competition policy and has a very large impact on the market position and profits of the enterprise.

At the same time, the pricing policy of many firms, especially in Russia, often turns out to be insufficiently qualified. The most common mistakes are: pricing is overly cost-oriented; prices are poorly adapted to changes in the market situation; the price is used without connection with other elements of marketing; prices are not structured enough across product options and market segments. These shortcomings are largely caused by the legacy of the planned economy, when prices were determined by directives or only on the basis of costs, and by the lack of knowledge of Russian managers in the field of marketing.

Marketing pricing methods:

Costly pricing methods

• calculation based on full costs;

  calculation based on variable costs;

  pricing based on ensuring target profit;

  return on investment method;

Demand driven pricing methods:

• price determination based on a survey of a representative sample of consumers;

  auction method;

  trial sales method (experimental method);

  parametric method;

Competitor-Based Pricing Methods:

• method of monitoring competitive prices;

Manufacturing pricing methods (mix):

• aggregate method;

  reverse costing;

  calculation equalization

It is extremely important to use a combined system of methods for determining the sale price, simultaneously with solving the problem of developing production techniques, management methods that would ensure a high level of product quality and a planned profit.

Primary attention is paid to pricing issues, in relation to setting prices for new products and forecasting pricing policy based on all stages of the product life cycle in the domestic and world markets. Determining the price of market novelty goods is a difficult and responsible task, since the trademark of such goods is not yet known to buyers, as well as their consumer properties and technical characteristics. In this regard, it is important to create demand for new products from consumers, which will require significant costs.

Antonina Nikolaevna Gavrilova Candidate of Economic Sciences, Associate Professor; Department of Finance and Credit, Faculty of Economics, Voronezh State University
© Elitarium — Distance Education Center

One of the most significant factors determining the efficiency of the enterprise is the pricing policy in the commodity markets. Prices provide the enterprise with the planned profit, the competitiveness of products, and the demand for it. Through prices, the final commercial goals are realized, the efficiency of all parts of the production and marketing structure of the enterprise is determined.

If a certain level of profitability is not included in the price of products, then at each subsequent stage of the capital circulation, the enterprise will have less and less cash, which will ultimately affect both production volumes and the financial condition of the enterprise. At the same time, in a competitive environment, it is sometimes permissible to use unprofitable prices to conquer new sales markets, oust competing firms and attract new consumers. An enterprise, in order to enter new markets, sometimes deliberately reduces its sales revenue in order to subsequently compensate for losses by reorienting demand for its products.

If an enterprise can influence the cost of production only to a very small extent, since the flexibility of an enterprise is limited, as a rule, by the spread of prices for raw materials, materials, semi-finished products and labor, as well as internal production reserves to reduce the material intensity of products, then the selling price for its products is can be set to virtually unlimited limits. However, the possibility of establishing an unlimited price does not entail the obligation of the consumer to purchase the company's products at the price set by him. Thus, the pricing strategy of the enterprise is the essence of the solution to the dilemma between the high selling price and large sales volumes. Let's try to consider various options for the enterprise to set prices for products sold.

Pricing and price management strategies

Price- the only element of traditional marketing that provides the company with real income. The market price is not an independent variable, its value depends on the value of other elements of marketing, as well as the level of competition in the market and the general state of the economy. Usually, other elements of marketing also change (for example, by increasing product differentiation in order to maximize the price, or at least the difference between price and cost).

The main objective of the pricing strategy in a market economy is to maximize profits with the planned sales volume. The pricing strategy should ensure long-term satisfaction of consumer needs through the optimal combination of the internal development strategy of the enterprise and the parameters of the external environment as part of a long-term marketing strategy.

Therefore, when developing a pricing strategy, each enterprise must determine for itself its main goals, such as maximizing revenue, price, sales volumes or competitiveness while ensuring a certain profitability.

The pricing strategy structure consists of a pricing strategy and a pricing management strategy.

Pricing strategy allows you to determine from the standpoint of marketing the price level and marginal prices for individual groups of products. Pricing should always be carried out taking into account the range and quality of products, their usefulness, the importance and purchasing power of consumers and the prices of competitors. In some cases, the prices of substitute products should also be taken into account.

Price management strategy there is a set of measures to maintain conditional prices with their actual regulation in accordance with the diversity and characteristics of demand, competition in the market.

The main steps in developing a pricing strategy:

1. Price analysis(includes getting answers to the following questions):

• whether price norms are defined;
• whether the characteristic of the consumer is taken into account;
• whether price differentiation is justified;
• whether the possible trend of price changes is taken into account;
• Are pricing norms sufficiently linked to other marketing tools?
• whether they allow them to compete;
• whether the flexibility of demand is taken into account when setting the price;
• whether the reaction of competitors to the price of this type of product is taken into account;
• whether the price corresponds to the image of the product;
• whether the stage of the product life cycle is taken into account when setting the price;
• Are the discount rates correct?
• whether price differentiation is envisaged (by regions, categories of consumers, seasons, etc.);
• determination of the objectives of the pricing strategy.

2. Setting goals and directions for pricing:

• pricing objectives - profit, revenue, price maintenance, anti-competition;
• pricing directions - by price level, price regulation, discount system.

3. Final decision on pricing strategy.

In each type of market, taking into account the tasks facing the enterprise and the prevailing market conditions, the following tasks can be solved by pricing:

• Ensuring the planned rate of return guaranteeing competitiveness and fast sales of the company's products. Here you need to be quite careful, as this can lead to the fact that the price ceases to play a positive role in marketing.
• Creating a cash reserve: if the company has problems with the sale of products, the influx of money may be more important than profit. This situation is typical today for many enterprises in relation to "live" money. Sometimes the value of existing inventory is such that it is better to sell it at or below cost rather than keep it in stock and wait for market changes. In some cases, keeping prices low, when a firm position in the market has been won, can deter the emergence of new competitors (prices are not high enough to cover the costs of organizing a new production for newcomers).
• Ensuring a given sales volume when for the sake of maintaining a long-term position in the market and increasing sales volumes, you can give up a share of profits. A situation is considered positive when a product simultaneously has qualitative advantages over competitors' products. In this case, after conquering a certain market share, it is possible to slightly increase prices over time. An extreme form of such a policy is “exclusive” pricing, when the price of a product is set so low that it leads to the exit of some competitors from the market.
• Gaining prestige: the most effective way in cases where the consumer finds it difficult to determine the difference in the quality of competitors' products. The prestigious price should accordingly belong to the product, which is appropriately advertised and promoted on the market.
• Full utilization of production capacity due to "off-peak" pricing. It is effective where there are high "settled" and low "changing" prices, where demand changes with a certain frequency (for example, natural resources, transport, etc.). When demand is low, instead of leaving production capacity unused without recovering the fixed part of the cost, it is necessary to stimulate demand by valuing the product more than the variable component of demand.

The problem of pricing occupies a key place in the system of market relations. After market reforms in Russia, enterprises mainly use free (market) prices, the value of which is determined by supply and demand. They may change for the same product depending on sales volume or payment terms. As a rule, the greater the volume of sales per consumer, the lower the selling price per unit.

Prices can be wholesale (holiday) and retail. Consider their composition and structure:

• Enterprise wholesale price includes the total cost of production and the profit of the enterprise. At wholesale prices of the enterprise, products are sold to other enterprises or trade and marketing organizations.
• wholesale industry price includes enterprise wholesale price, value added tax and excises. At the wholesale price of the industry, products are sold outside the industry. If products are sold through sales organizations and wholesale trade depots, then a mark-up is included in the wholesale price of the industry to cover the costs and generate profits for these organizations.
• Retail price includes the wholesale price of the industry and the trade margin (discount). If wholesale prices are used mainly in on-farm turnover, then at retail prices, goods are sold to the final consumer - the population.

The price level is the most important factor influencing the proceeds from sales of products and, consequently, the amount of profit.

Also of great importance terms of sale. The sooner payment is due in accordance with the concluded agreements, the faster the company is able to involve funds in economic turnover and receive additional benefits, as well as reduce the likelihood of non-payments. Therefore, the sale at reduced prices on the condition of prepayment or payment upon shipment for the enterprise often looks preferable than, for example, the shipment of products at higher prices, but on a deferred payment basis.

Pricing Methods

The following stages of the pricing process at the enterprise are distinguished:

• determination of the base price, i.e. prices without discounts, markups, transport, insurance, service components;
• determination of the price taking into account the above components, discounts, markups.

The following basic methods for calculating the base price are used, which can be used in isolation or in various combinations with each other:

1. Total cost method, or Cost plus method (Full Cost Pricing, Target Pricing, Cost Plus Pricing). To the full amount of costs (fixed and variable) add a certain amount corresponding to the rate of return. If the production cost is taken as the basis, then the allowance should cover the costs of sales and ensure profit. In any case, the surcharge includes indirect taxes and customs duties passed on to the buyer. It is used in enterprises with a well-defined product differentiation to calculate prices for traditional products, as well as to set prices for completely new products that do not have price precedents. This method is most effective when calculating prices for goods of reduced competitiveness.

Example. A household goods business wishes to set a price for a new product. The projected annual production is 10,000 units. Presumably direct costs of raw materials and materials per unit of product - 1000 rubles. Direct labor costs per unit of product - 400 rubles. The company plans the amount of fixed costs 2000 thousand rubles. per year and hopes to receive 4,000 thousand rubles. arrived. Calculate the price using the marginal cost method.

1. The planned sales revenue after reimbursement of variable costs will be: 2000 + 4000 = 6000 thousand rubles.
2. The desired result from sales after reimbursement of variable costs per unit of product: 6,000,000 / 10,000 = 600 rubles.
3. Total variable costs per unit of product: 400 + 1000 = 1400 rubles.
4. Price (variable costs per unit of product + desired result from sales after reimbursement of variable costs per unit of product): 600 + 1400 = 2000 rubles.

2. Manufacturing cost method (Conversion Cost Pricing). The total cost of purchased raw materials, materials, semi-finished products is increased by a percentage corresponding to the enterprise's own contribution to increasing the value of the goods. The method is not applicable for long-term pricing decisions; does not replace, but complements the full cost method. It is applied in specific conditions and cases of decision-making:

• about increasing the mass of profits by increasing the volume of production;
• refusal or continuation of competition;
• about changing the assortment policy in determining the most and least profitable products;
• for one-time (individual, non-mass) orders.

3. Marginal cost method (Direct Costing System) involves an increase in variable costs per unit of output by a percentage that covers costs and provides a sufficient rate of return. Provides broader pricing options: full coverage of fixed costs and profit maximization.

4. Return on investment method (Return on Investment Pricing) is based on the fact that the project must provide a profitability not lower than the cost of borrowed funds. The amount of interest for the loan is added to the total cost per unit of production. The only method that takes into account the payment of financial resources necessary for the production and sale of goods. Suitable for enterprises with a wide range of products, each of which has its own variable costs. It is suitable for traditionally produced goods with an established market price, as well as for new products. It is used successfully when making decisions on the volume of production of a new product for the enterprise.

Example. The company sets the price for a new product. The projected annual production volume is 40,000 units, the estimated variable costs per unit of product are 35 rubles. The total amount of fixed costs is 700,000 rubles. The project will require additional financing (loan) in the amount of 1,000,000 rubles. at 17% per annum. Calculate the price using the ROI method.

1. Variable costs per unit 35 rubles. Fixed costs per unit of product: 700,000 / 40,000 = 17.5 rubles.
2. Total costs per unit of product: 35 + 17.5 = 52.5 rubles.
3. The desired profit will be: (1,000,000 × 0.17) / 40,000 = 4.25 rubles / unit. (not less).
4. The minimum allowable price of the product: 35 + 17.5 + 4.25 = 56.75 rubles.

5. Methods of marketing evaluations (Pricing based on Market Considerations). The company tries to find out the price at which the buyer definitely takes the goods. Prices are focused on improving the competitiveness of the goods, and not on meeting the needs of the enterprise in financial resources to cover costs.

Example. The elasticity of demand from prices for the company's products is 1.75.

1. Determine the consequences of a price reduction by 1 ruble, if before this reduction the sales volume was 10,000 products at a price of 17.5 rubles, and the total costs were equal to 100,000 rubles. (including permanent - 20 thousand rubles) for the entire volume of production.

Sales revenue before the price change: 17.5 × 10,000 = 175,000 rubles.

Profit before price change: 175,000 - 100,000 = 75,000 rubles.

Sales volume after price reduction: 10,000 × (1.75 × 1/17.5) + 10,000 = 11,000 units

Sales revenue after price reduction: 16.5 × 11,000 = 181,500 rubles.

The total cost of production and sale of products after a price reduction:

• fixed costs: 20,000 rubles;
• variable costs: (100,000 - 20,000) / 10,000) × 11,000 \u003d 88,000 rubles.
• total costs: 20,000 + 88,000 = 108,000 rubles.

Profit after price reduction: 181500 - 108000 = 73500 rubles.

Thus, the price reduction led to a loss of profit in the amount of 1,500 rubles: 75,000 - 73,500 = 1,500 rubles.

2. Determine whether it is profitable for the company to reduce the price by 1 rub./unit if the level of fixed costs was 50% of total costs.

Costs after price reduction at a new level of fixed costs in the cost structure:

• fixed costs: 100,000 × 0.50 = 50,000 rubles;
• variable costs: (100,000 - 50,000) / 10,000) × 11,000 \u003d 55,000 rubles.
• total costs: 50,000 + 55,000 = 105,000 rubles.

Profit after price reduction: 181500 - 105000 = 76500 rubles.

Thus, lowering the price is beneficial, since it leads to additional profit in the amount of 1,500 rubles: 76,500 - 75,000 = 1,500 rubles.