Pricing and pricing policy of the enterprise. Pricing policy of the enterprise Pricing policy definition and main characteristics

The pricing policy of enterprises (firms) with various forms of ownership should be built taking into account the state pricing policy and the specifics of the market economy.

The pricing policy of an enterprise is primarily determined by its own potential, technical base, the availability of sufficient capital, qualified personnel, a modern, advanced organization of production, and not only by the state of supply and demand in the market. Even the existing demand must be able to satisfy, moreover, at a certain time, in the required volume, in a specific place and while ensuring the appropriate quality of goods (services) and prices (tariffs) acceptable to the consumer (buyer).

The basis of such activity in the field of pricing is the determination of the purpose and the strategic line of development of the enterprise. In the course of its practical implementation, organizational, technical, economic, informational, marketing, managerial and other actions for the formation and application of prices are primarily consistent with all the changes that the strategic line undergoes in the framework of the enterprise's life in the market. At the same time, price policy and price management play such an important role in the activities of economic entities that they constitute one of the fundamental directions of their strategic development. Price is the most important element of the complex of market research, which belongs to the group of controlled factors and is the main indicator that determines income. In this regard, the significant importance of pricing for any enterprise (firm) is indisputable. The modern pricing policy is very diverse. Therefore, the study of the technology for calculating optimal, scientifically grounded prices is very important.

In modern conditions of market relations, there are two approaches to the process of market pricing: the establishment of individual and uniform prices. The individual price is determined on a contractual basis as a result of negotiations between the seller and the buyer. In conditions when a standardized product of mass or batch production is offered to a wide range of consumers, it is preferable to use uniform prices. In this case, the buyer knows the price of the product, can compare it with the price of the same type or interchangeable products, and it is relatively easy to make a purchase decision.

Despite the fact that at present, other, non-price factors of competition are being widely developed, the price still remains an essential element of competition policy, which has a great impact on the functioning of the enterprise, its stability and development prospects. However, the pricing policy of many enterprises turns out to be insufficiently developed, which does not exclude the adoption of wrong decisions, since pricing is too cost-oriented, prices do not take into account the dynamics of market conditions quickly enough and are not considered together with other elements of the marketing system, pricing strategies are rarely linked to the general development strategy of the enterprises, prices are not sufficiently structured for individual product options and market segments, there is no information on the pricing policy of the main competitors.

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

The main objectives of the pricing policy of any enterprise (firm) are as follows.

1. Ensuring the continued existence of the company. In the presence of excess capacity, intense competition in the market, changes in demand and consumer preferences, enterprises in order to continue production, liquidate stocks, often reduce prices. In this case, profit loses its meaning. As long as the price covers at least variable and part of fixed costs, production can continue. However, the question of enterprise survival can be viewed as a short-term goal.
2. Short-term achievement of profit maximization. Many businesses want to set a price for their product that would provide the maximum profit. To achieve this goal, it is necessary to determine the preliminary demand and costs for each price option. Then, on the basis of an alternative selection, the price that will bring the maximum profit in the short term is selected. It is assumed that demand and production costs are known in advance, although in reality they are very difficult to determine. In the implementation of this goal, the emphasis is on short-term profit expectations and does not take into account long-term prospects, as well as the opposing policies of competitors and the regulatory activities of the state. This goal is typical for enterprises in an unstable transitional economy, which is typical for modern Russia.
3. Short-term achievement of maximizing turnover. The price that stimulates the maximization of turnover is chosen when the product is produced corporately and it is difficult to determine the structure and level of production costs. Therefore, it is considered sufficient to know only the demand. To achieve this goal, the commission percentage of the sales volume is set for intermediaries. Short-term maximization of turnover can ensure maximum profit and market share in the long term.
4. Ensuring the maximum increase in sales. Firms pursuing this goal believe that increased sales will lead to a decrease in the cost of production per unit of output and, on this basis, to an increase in profits. Given the market reaction to price levels, these firms set prices as low as possible. This approach is called market attack pricing. If an enterprise lowers the prices of its products to the minimum permissible level, increases its share in the market, seeking to reduce the cost of production of a unit of goods as output grows, then on this basis it will be able to continue to reduce prices. However, such a policy can give a positive result only if there are a number of conditions: a) if the sensitivity of the market to prices is very high (if prices are lowered, demand increases); b) if it is possible to reduce production and sales costs as a result of an increase in output; c) if other market participants also do not begin to reduce prices or cannot withstand the competition.
5. "Skimming the cream" from the market. It is carried out at the expense of high prices. This occurs when a firm sets the highest prices for its new products, significantly higher than production prices. This pricing is called "premium". Separate market segments get cost savings from the appearance of new products, even at high prices, and better satisfy their needs. As soon as sales at a given price are reduced, the firm lowers the price to attract the next group of customers, thereby achieving the highest possible turnover in each segment of the target market.
6. Achieving leadership in quality. A firm that succeeds in establishing a reputation for leadership in quality sets a high price for its product to cover the high costs associated with improving quality and the costs of R&D.

The listed objectives of the pricing policy can be implemented at different times, at different prices, there may be a different ratio between them, but in aggregate they all serve to achieve a common goal - long-term profit maximization.

The mechanism for calculating prices involves choosing from the entire set of strategies and methods of pricing the most optimal option in setting the price of goods (services), which makes it possible to achieve an economically feasible combination in price of the opposite interests of the producer (seller) and consumer (buyer), since the seller is interested in reimbursing the costs incurred production and profit maximization, and the buyer, on the contrary, in reducing the price and, accordingly, in minimizing the seller's profit.

Pricing is the process of setting a price. With a given volume of output, there are objectively two prices for the production of an enterprise. The first, called the demand price, is the maximum price that buyers would agree to pay for the volume of products that the manufacturer offers them. The second, called the bid price, is the minimum price for which the manufacturer would agree to sell his product. These two prices may not be the same. If the demand price is higher than the supply price, then the company can manipulate prices in the resulting price corridor to implement its strategic goals in this period. The equality of the bid and ask prices actually means that there is only one price option that will break even for the seller and that is acceptable for the buyer. And finally, if the supply price exceeds the demand price, the manufacturer will be forced to sell the volume of production available to him at the demand price, incur losses, and then either try to minimize the cost price or change the production volume. Moreover, he will not necessarily choose the option of reducing production. It may also be beneficial to increase it, but on one condition - if with an increase in production volumes, the unit cost of production will fall. In practice, it can be difficult to calculate the bid and ask prices at any given time. Therefore, when forming their pricing policy, the heads of the enterprise are largely forced to act "by touch", i.e. by trial and error. But this does not mean that they are free to choose a pricing strategy, because "retribution" for any wrong price decision comes inevitably.

The determination of the firm's pricing strategy should be preceded by two preliminary stages. At the first stage, the analysis of the results of market research is carried out to determine its structure and elasticity of the demand curve for the products manufactured by the enterprise. The relationship between the amount of demand for a given type of product and its price is reflected by the demand curve, which, in accordance with the law of demand, has a negative slope. The coefficient of elasticity, which is the most important characteristic of any part of this curve, shows the percentage of the change in the value of demand for a given product when the price changes by 1%. When businesses raise or lower the price of their products, economists say that the producer is "moving" up or down the demand curve. The slope of the demand curve, or its elasticity, determines the amount of price reduction required to increase demand by 1%. If the curve has a steep slope, then a significant price reduction will be required to reach the point at which demand is 1% more. Conversely, if the demand curve is flat, you can limit yourself to only a small price reduction. Price change is the simplest mechanism for accounting for changes in demand, costs and the position of competitors. However, of all the variables that determine the amount of demand for products, it is the price change that is easiest for competitors to duplicate. If they choose a copying strategy, it will reduce the effectiveness of the pricing policy to almost zero and may lead to a "price war".

At the second stage of the pricing policy, the strategy of the company's behavior in the market is clearly defined (ensuring survival, maximizing current profits, winning leadership in terms of sales volume or product quality, etc.). Pricing policy serves as a tool for implementing this strategy. Only after determining the configuration of the demand curve and the strategy of behavior in the market, the company can start choosing one or another option for pricing policy. There are several basic pricing methods.

The first of them (the simplest) is to charge a certain margin on the cost of goods. For example, the production and sale of a certain product may cost a company 200 rubles, and it wants to make a profit based on the rate of 10%. In this case, the selling price of the product will be 220 rubles. This method of pricing is used by almost all enterprises in a deficit economy, when demand obviously exceeds supply. But even in conditions of developed money circulation, many enterprises determine the price according to the "costs plus profit" formula. These primarily include monopoly enterprises, which may not worry about fluctuations in demand for their services. Oddly enough, some non-monopolists in the service sector adhere to similar pricing principles, for example, retailers. Moreover, the size of store markups can vary widely depending on both their location and the type of product.

Cost-plus-profit pricing remains popular for three reasons:

1) sellers know more about costs than about demand. By justifying the price with costs, the seller simplifies the pricing problem for himself, since he does not have to adjust prices too often depending on demand;
2) price competition is minimized. If this pricing method is used by all firms in the industry, then their prices are likely to be similar;
3) the seller believes that he is setting a "fair" price for both himself and the buyer.

The second pricing method, also based on costs, is the calculation of prices that provide a certain amount of gross profit. This method is more complex but more flexible. It involves comparing various combinations of prices and sales volumes and choosing the one that will allow you to overcome the break-even level and get the planned profit. This method is used, as a rule, by large companies with large specialized departments responsible for price marketing.

The third pricing method is to set a price close to the demand price. Marketers identify the "price ceiling" of a given product, i.e. the maximum amount that consumers are willing to pay. Then they try to maximize profits by controlling the cost without exceeding this "ceiling". The transition of most firms from a pricing strategy based on calculating costs to a strategy based on determining the price of demand is an important indicator of market competitiveness and high elasticity of demand.

The fourth pricing method is also known - following competitors, focusing on the current price level. In markets with an oligopolistic structure (for example, steel or oil markets), the price variation of the offered products is usually minimal. This is due to the prevalence of the policy of copying the price fluctuations of competitors. Smaller firms follow the leader, changing prices when the leader changes them, and not depending on fluctuations in the demand for goods or changes in their costs. Some firms can calculate their price by providing a permanent discount or markup on the leader's price, depending on the characteristics of their products, location, etc. This is often done, for example, by small independent sellers of gasoline, selling it at retail at a price slightly higher than the price of the leader of the local gasoline market.

Changes in pricing methods should not be made too often, as this can affect all indicators of the enterprise and destabilize its position in the market. Using one or another pricing method, the company sets the base price of its products. However, in order to take into account short-term changes in costs, the structure of demand, conditions of competition and other factors, an enterprise must develop a policy of "adjusting" the base price, ways of establishing its final value. Businesses can apply standard or variable price policies. When they strive to maintain a constant price for a long time, then instead of changing it (with an increase or decrease in costs), they can reduce or increase the amount of goods supplied in one package, or expand or reduce the standard set of services.

Businesses can also opt for flat or flexible pricing policies. Under the system of uniform prices, the firm sets the same price for all consumers who would like to purchase goods on similar terms. The price can vary strictly in proportion to the amount of purchased products, but not depending on who buys and how much. A flexible pricing policy is an adjustment to the base price through discounts or markups. The buyer bargains with the seller, as a result of this bargaining and the final selling price is set. Previously, bargaining was the only way to set the final price. Currently, in many countries, flexible pricing policy is significantly limited. Thus, the Civil Code of the Russian Federation explicitly prohibits the selection of buyers.

The final product price also depends on whether the seller rounds up prices. In some countries, retailers believe that the price of a product must be unrounded, for example, not $ 5, but $ 4.99. This policy is explained by the following considerations. Buyers love to get their change. Since cashiers are required to issue change, management ensures that transactions are properly recorded and money is deposited in the cash register. Consumers get the impression that the firm carefully analyzes its prices and sets them at the lowest possible level. In addition, consumers may get the impression that this is a price reduction.

Thus, pricing is a complex process, during which not only objective factors (costs, demand and competition) must be taken into account, but also many subjective manifestations. It consists of the processes of price formation for individual goods and the price system as a whole; in a free market, the pricing process occurs spontaneously, prices are formed under the influence of supply and demand in a competitive environment, as well as decision-making related to setting the price of a product or service.

Pricing decisions for most products cannot be made by an enterprise without considering all aspects of the marketing structure, prices of related products, competitor prices, production and marketing costs of the product, demand, and pricing goals.

Thus, in market conditions, the pricing policy of an enterprise (firm) consists of many factors associated with the choice of specific pricing goals, approaches and methods for determining prices for new and existing products, services provided in order to increase sales volumes, turnover, increase the level of production, maximize profits and strengthening the market position of the enterprise (firm).

Marketing strategy
Marketing management ( English)
Market dominance ( English)

Price policy- these are the principles and methods for determining prices for goods and services.

In the future, as part of the implementation of the strategy, tactical activities(to stimulate sales), including systems of price discounts and non-price incentives for buyers.

In the course of the implementation of the pricing policy, the firm's management must adjust the direct measures and monitor the timing of the strategy change. Prices are actively used in competition to ensure a sufficient level of profit. Determining the prices of goods and services is one of the most important problems of any enterprise, since the optimal price can ensure its financial well-being. The current pricing policy largely depends on the type of goods or services offered by the enterprise. It is formed in close connection with the planning of the production of goods or services, identifying consumer demands, and stimulating sales. The price should be set in such a way that, on the one hand, it meets the needs and requirements of buyers, and on the other hand, it contributes to the achievement of the goals set by the enterprise, which is to ensure the receipt of sufficient financial resources. The pricing policy is aimed at establishing such prices for goods and services, depending on the prevailing market conditions, which will allow the company to receive the planned profit volume and solve other strategic and operational tasks.

Within the framework of the general pricing policy, decisions are made in accordance with the situation in the target market of the enterprise, methods and structure of marketing. The general pricing policy provides for the implementation of coordinated actions aimed at achieving the long- and short-term goals of the enterprise. At the same time, his management determines the general pricing policy, linking individual solutions into an integrated system: the relationship between the prices of goods within the firm's nomenclature, the frequency of using special discounts and price changes, the ratio of prices to competitors' prices, and the choice of a method for setting prices for new goods.

The determination of the pricing policy is based on the following questions:

what price the buyer could pay for the product;
how the price change affects the sales volume;
what are the constituent components of costs;
what is the nature of the competition in the market segment;
what should be the level of the threshold price (minimum), which ensures the break-even of the company;
what kind of discount can be given to buyers;
whether the delivery of goods and other additional services will affect the increase in sales.

The general policy of the enterprise should ultimately be aimed at meeting specific human needs. However, if the consumer is hesitant about which product to give preference to, often based on unconscious considerations, the company, through an active marketing policy, should try to influence its choice in favor of its products. Therefore, the determination of the pricing policy is one of the most important directions of the enterprise's practice, since under any conditions it is unacceptable to set prices without a serious analysis of the possible consequences of each of the options for resolving this issue.

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

With the help of various pricing methods, a specific price is set depending on certain circumstances or goals. To make a final decision on prices, the manager must consider all the proposed options for calculating prices. In the process of setting the price of products, the enterprise (firm) must clearly define the goals that it wants to achieve. The clearer they are, the easier it is to set prices for new products. Possible goals of pricing policy include:

ensuring the survival of the firm;
maximizing current profit;
gaining leadership in terms of the "market share" indicator;
gaining leadership in terms of "product quality";
skimming policy;
short-term increase in sales of products.

When analyzing the price of a competitor, the main focus should be on the system of discounts that he provides. In world practice, there are about 20 types of price discounts:

Bonus discounts for turnover are given to regular customers depending on the sales turnover.
Progressive discounts are provided to the buyer for quantity, purchase volume, seriality.
An exchange bill or discount is provided for the return of an old, previously purchased product from a given company.
Export discount when selling goods for export.
Functional or retail discounts are granted to manufacturers by distribution services for performing certain functions.
Special discounts are given by the seller to those buyers in whom the seller is more interested.
Hidden discounts are provided to the buyer in the form of free samples (samples, etc.).

Pricing policy of the state

Price restrictions

They are used by the government to contain inflation (in France in the 1960s, as part of indicative planning), as well as to support low-income citizens in conditions of high inflation (restrictions on the growth of prices for essential goods).

Literature

Daily J.L. Effective pricing is the foundation of a competitive advantage. - M .: Publishing House "Williams", 2004.
Milgrom P., Roberts J. Economics, Organization and Management: In 2 vols. - SPb .: School of Economics, 1999.

Tutorials

Gerasimenko V.V. Pricing policy of the company. - M .: Finstatinform,

Previous edition: Nagle T.G., Holden R.K. Pricing Strategy and Tactics / 2nd ed. - SPb .: Peter, 2001

Tarasevich V.M. Pricing policy of the enterprise. - SPb .: Peter, 2003
Evdokimova T.G., Makhovikova G.A., Zheltyakova I.A., Pereverzeva S.V. Theory and practice of price management. - SPb .: Neva,
I. V. Lipsits Pricing (Managing Pricing in an Organization) / 3rd ed. - M .: Economist, 2004

Previous edition: I. V. Lipsits Commercial Pricing / 2nd ed. - M .: Publishing house BEK,

Nagle T.G. Pricing Strategy and Tactics / 3rd ed. - SPb .: Peter, 2004
Prices and pricing: Textbook for universities / Ed. V.E. Esipova. 4th ed. - SPb .: Peter, 2005
Parshin V.F. Pricing policy of the enterprise: manual / V.F. Parshin. - Minsk: Vysh. shk., 2010 .-- 336 p.

Links

gooper.ru is an information resource reflecting the pricing policy of the countries of the world. The site contains prices for the basket of products and services.

After the markets have been studied and the type of market has been selected, it is very important to determine the goals of the pricing policy of the enterprise (firm).

There are several main various goals of pricing policy, the implementation of which can be carried out in the short, medium or long term. In everyday practice, it is important to find and implement with the help of pricing policy the optimal ratio of as many goals as possible.

The most typical main objectives of pricing policy are as follows:

ensuring sales, survival of the enterprise. This is the goal for any firm operating in a highly competitive environment, i.e. when there are many manufacturers with similar products on the market, it is the main one. In order to continue production and prevent bankruptcy, firms are forced to set low prices for goods (to penetrate the market and win more market share) in the hope of increased sales and a favorable response from customers. In this case, profit may lose its paramount importance. If the price covers at least variable costs and a part of fixed costs, then production can continue further, but such a pricing policy of entrepreneurial activity is acceptable only for the short term;
maximizing profits, increasing the level of profitability. This goal is set by those firms that assess demand, as well as production and distribution costs at different price levels and choose a price that will ensure the maximum profit in the future, increase profitability and maximum cost recovery. Thanks to this, profitability increases and the reproduction, including investment, opportunities of the company expand.

This goal has several options:

- the firm's desire to achieve a stable high level of profit over a number of years. Such a goal can be set by a company that has a stable position in the market, and also wants to use a favorable market situation for itself;
- the establishment by the firm of a stable income based on the average rate of return;
- higher prices and higher profits due to the growth of capital investments;
- the desire to increase the absolute amount of balance sheet profit and increase the profitability of the company (the ratio of profit to capital) or the profitability of commodity sales (the ratio of profit to cost).

It should be especially emphasized that essential goods (bread, sugar, milk, etc.) have a low, and prestigious special quality - a high relative profit, and therefore provide increased absolute profit.

The goals of maximizing profits, increasing profitability can be set both in terms of the current pricing policy and in a promising pricing strategy;

slow market penetration. This pricing policy is typical for firms that believe that demand is highly sensitive to price, but minimally susceptible to advertising. They set low prices for the product and advertise it heavily in the media. Low prices will contribute to the rapid recognition of the product, and the small cost of promoting it will lead to an increase in profits;
maintaining a stable position in the market (market retention). This goal is to maintain a stable existing position in the market and favorable conditions for its activities. In this regard, the company takes appropriate measures to prevent aggravation of competition and sales decline, and conducts marketing research. Firms carefully analyze the market situation, price dynamics, the appearance of new products, and control the actions of competitors. At the same time, they do not allow either overstating or understating the prices of goods, while at the same time striving to reduce the costs of production, circulation and sale.

It is possible to maintain a stable position in the market with moderate profitability and rather satisfactory other indicators of the firm's performance. For large foreign corporations (companies), in most cases, an 8-10% return on equity is sufficient. In the domestic economy, for expanded reproduction, the level of profitability should be at least 20–30% in industry, and in agriculture, the profit should be from 30 to 40% of the cost level. However, in practice, the real rate of return is much higher than the above figures, it largely depends on the state of the modern economy;

expanding market share, on which the firm sells its goods. This is often associated with a desire for market leadership. However, even for firms that do not belong to the leading group, setting this goal (for example, increasing their market share from 10 to 13% within one year) can be important. In accordance with this, it is necessary to form the price and the entire marketing complex;
maximizing turnover. This goal is to set a price that will stimulate the maximization of turnover. It is usually chosen when the product is produced corporately and, therefore, it is difficult to define a complex structure and cost function. In such a situation, it is sufficient to define only the demand function. It is relatively easy to realize this goal through the establishment in the field of sales of a percentage of commissions from its volume;
price breakout policy. It consists in setting prices at a level lower than most buyers believe deserves a product with a given economic value. At the same time, by increasing the volume of sales and the captured market share, a large amount of profit is obtained;
maximizing sales. This goal is pursued by firms that believe that increased sales will lead to lower costs per unit of production and, ultimately, to higher profits. Based on the sensitivity of the market to the price level, such firms set the price as low as possible. This approach is called market attack pricing.

However, the policy of low prices can give a positive result only if there are a number of conditions, in particular if: the sensitivity of the market to prices is very high; it is possible to reduce the costs of production and circulation as a result of the expansion of production volumes; lower prices will scare competitors away and they will not follow suit;

♦ maintenance and provision of liquidity (solvency) of the enterprise. Such a pricing and marketing policy of a company in market conditions is always relevant, since the stable insolvency of an enterprise threatens to declare its insolvency (bankruptcy). If the company has reliable customers and the problem of settlement does not arise, then all the same, the management needs to clearly understand the conditions and prerequisites that ensure stable solvency. It should be borne in mind that the actual price is the paid price, which is expressed in the receipt of money on the company's account.

Reliable and timely payment for the purchased goods of the enterprise by customers is an important condition for a business partnership. Therefore, when implementing a pricing strategy, it is necessary to choose customers taking into account their solvency, go for profitable forms of payment, in particular prepayment, providing price incentives to customers who are impeccable in payments, and avoid overstating the supplied goods;

gaining leadership in the market and in determining prices. This most active and prestigious pricing policy is typical for large enterprises (associations and firms).

However, in regional and local markets, the price leadership may belong to smaller enterprises. It reflects the position of an enterprise in the market as one of the most active in setting general price levels for certain types of products (often lower prices than existing ones, or higher prices for a prestigious, high-quality product) and introducing innovations in the price structure. Such enterprises are among the first to change the price of goods and influence the level of exchange prices. In order to take a leading position in the market, the company must have sufficient potential.

The opposite pricing policy is also observed - passive following the leader, which under certain conditions can be a forced strategy;

"skimming". This goal reflects the functioning of the market by setting high prices. The company assigns the highest possible price for each of its new products due to the qualitative advantages of the new product. When its sales at a given price are reduced, the company lowers it, attracting the next group of customers. Thus, in each segment of the target market, the maximum possible turnover of goods is achieved and a large benefit from high profitability of sales is achieved;
leadership in quality. This is the goal of the pricing policy pursued by firms that are able to consolidate this image. At the same time, they set a high price in order to cover the high costs associated with improving the quality (unique, rare properties and characteristics of the product) and the costs necessary for this.

The listed objectives of the pricing policy relate to each other in a certain way, but they do not always coincide. In addition, their achievement occurs at different times and at different prices.

The objectives of the pricing policy are closely related to the objectives of marketing, which in turn are aimed at achieving the overall production objectives of the enterprise. The unit price multiplied by the quantity is the main determinant of the income of the enterprise, which together with the cost structure determine the amount of its profit. In general, the goals of pricing policy can be expressed as achieving high profits or obtaining a certain rate of return from working capital. In the case of certain projects, the goals of the pricing policy may be aimed at increasing the share in existing markets or providing an enterprise's access to a new market. In addition, the entity can achieve price stability to avoid excessive fluctuations in profit margins and administrative costs associated with price changes.

The 21st century is an era where the pricing of an enterprise, its strategy and policy are the foundations of the market, the most important lever of economic management of the company.

It is a polyprocess, which consists of a number of interrelated stages.

The main task of marketing and the development of a company's pricing policy is an independent scheme created by leading experts based on the goals and objectives of the company, costs, organizational structure, as well as other external and internal factors.

Usually, when creating this scheme, such issues as the pricing future of the company, the feasibility of developing a pricing policy, the price response to marketing, the market policy of one or another competitor, the choice of goods for which prices should be changed, and many others are taken into account.

But all this information is already familiar to a person, even a little knowledgeable in economic matters. Are there any “shadow places” in such discipline as price strategy in marketing?

Let's figure out the goals

The development of a marketing pricing strategy for the company, which will include the formation of the pricing policy (CP) of the enterprise, usually takes place in several stages. At the first stage of the strategy, specialists decide which economic goals they pursue.

As a rule, there are three of them: maximizing profit, ensuring sales, and keeping the market.

And finally, at the third stage, employees must study the competitor's products (here the rule "who is warned is armed"). Economic experts of a particular firm can create customer surveys in which they would find out the most objective attitude towards the company itself and its competitors.

Also, we must not forget about the pricing in marketing. It is necessary to monitor whether product prices should be adjusted.

Let's say the goods of the above company were made from higher quality raw materials than the competitor's goods. In this case, a higher cost strategy will be justified and will not affect demand.

Main CPU types and world strategies

Russian economists identify the following types of enterprise pricing policy and pricing, unique methods of responding to the work of competitors:

All these basic methods, pricing principles are typical for modern Russian companies. It should be noted that in the West these strategies are gradually becoming obsolete.

One of the more popular strategies is "The method of skimming the cream"... It is beneficial for the leading company, since it allows you to get the maximum profit in a short time.

The company's product is literally "thrown in" at a very low price (dumped), and only eventually returns to the standard price. The principles of such a strategy are to reduce research and development costs, as well as skillful pricing.

Another interesting pricing policy in the marketing system is "Implementation". This strategy allows you to throw a large amount of goods onto the market, and competitors will not have time to react at this time. The company will be able to capture a huge market share in a short time.

The least studied remains neutral strategy, which is based on the formula P = Z + A + C, where Z - production costs; A - expenses for the implementation of an administrative nature; C is the average rate of market or industry profit.

And, finally, the pricing policy of the organization also implies moving price strategy, which involves the establishment of the value of the goods in direct proportion to the equilibrium of supply and demand. Typically, this strategy is applied to consumer goods.

Course in various market patterns

The organization's pricing policy is a lever for the effectiveness of marketing, the price behavior of an enterprise in the market. In many ways, she is dependent on.

At the moment, there are 4 structural types, which are characterized by the unique strategic conditions of pricing and industry prices of each specific enterprise:

free competitive market
monopolistic
oligopolistic
pure monopoly market.

For the analysis of the company's pricing policy to be of the highest quality, it will be necessary to find out what is typical in terms of pricing for all these types of markets.

The cornerstone of any one is a strategy for calculating the baseline market price. The first step is to set goals for pricing activities, then costs are calculated taking into account all costs.

Enterprise economists will have to determine whether there is a balance in the ratio of supply and demand for the goods of the specified firm. Next, you should start researching products, marketing strategies and prices of competing firms (this can be checked using anonymous public opinion polls).

Pricing policy in the marketing system implies a quick response of prices to any changes in the market. It remains only to choose a pricing strategy or method that will allow you to bypass competitors in the market and establish the final cost of the product, which will be equal to the market value, above or below it.

Small conclusion

The principles of pricing, its methods, foundations and strategies are the interaction of two components of the main economic balance - supply and demand. Price - this is one of the main "cogs" of the correct pricing strategy of the enterprise, a method that allows you to increase production efficiency.

Prices for products can be free, market prices, which do not depend on the state and are set by the market competition mechanism. But in marketing, there are two more types of dependent prices - regulated and fixed. Also, prices can be divided into regional, zonal and uniform, depending on the location of the enterprise. The pricing policy of an enterprise can be of a different nature - wholesale, retail, purchasing.

The organization's pricing policy itself is a complex process in which it is necessary to set goals and objectives for the AC, strategic operations, a method of competitive response, as well as an assessment of production costs, competitors' prices and demand, and analysis of pricing methods.

If someone asks you where the prices come from, you can show them this video:

Enterprise pricing is a complex process consisting of several interrelated stages: collection and systematic analysis of market information.

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

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

Tasks and mechanism for developing a pricing policy.

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

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

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

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

what measures of pricing policy should be accompanied by the introduction of a new product into the market;

for which goods from the sold assortment it is necessary to change prices;

in which markets an active pricing policy should be pursued, the pricing strategy should be changed;

how to distribute certain price changes over time;

what price measures can be used to improve sales efficiency;

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

Setting the goals of pricing policy.

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

Ensuring sales (survival) is the main goal of enterprises operating in a highly competitive environment when there are many manufacturers of similar goods on the market. The choice of this goal is possible in those cases when consumer demand for price is elastic, as well as in those cases when the enterprise sets the task of achieving maximum growth in sales and increasing total profit by slightly reducing income from each unit of goods. An enterprise can proceed from the assumption that an increase in sales will reduce the relative costs of production and sales, which makes it possible to increase sales of products. To this end, the company lowers prices - it uses the so-called penetration prices - specially lowered prices that promote sales expansion and capture a large market share.

Setting the goal of maximizing profit means that the company seeks to maximize its current profit. It estimates demand and costs at different price levels and chooses a price that will maximize cost recovery.

The goal pursuing market retention presupposes the preservation of the existing position in the market or favorable conditions for its activities by the enterprise, which requires the adoption of various measures to prevent a decline in sales and aggravation of competition.

The above pricing goals are usually long-term, calculated over a relatively long period of time. In addition to long-term, an enterprise can set short-term goals for pricing policy. Typically these include the following:

stabilization of the market situation;

reducing the impact of price changes on demand;

maintaining the existing leadership in prices;

limiting potential competition;

enhancing the image of an enterprise or product;

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

Patterns of demand. The study of the patterns of the formation of demand for a manufactured product is an important stage in the development of an enterprise's pricing policy. Demand patterns are analyzed using supply and demand curves and price elasticities.

The less elastic demand reacts, the higher the price the seller of the goods can set. Conversely, the more elastic demand reacts, the more reasons to use a policy of lowering prices for manufactured products, since this leads to an increase in sales volumes, and, consequently, in the income of the enterprise.

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

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

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

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

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

Studying the products of competitors, their price catalogs, polling buyers, the company must objectively assess its position in the market and, on this basis, adjust the prices for products. Prices can be higher than those of competitors, if the manufactured product is superior to them in quality characteristics, and vice versa, if the consumer properties of the product are inferior to the corresponding characteristics of competitors' products, then the prices should be lower. If the product offered by the company is similar to the products of its main competitors, then its price will be close to the prices of competitors' products.

Enterprise pricing strategy.

The company develops a pricing strategy based on the characteristics of the product, the possibilities of changing prices and production conditions (costs), the market situation, the ratio of supply and demand.

An enterprise can choose a passive pricing strategy, following the "price leader" or the bulk of producers in the market, or try to implement an active pricing strategy that takes into account primarily its own interests. The choice of a pricing strategy, moreover, largely depends on whether the company offers a new, modified or traditional product on the market.

When launching a new product, the company chooses, as a rule, one of the following pricing strategies.

Skimming strategy. Its essence lies in the fact that from the very beginning of the appearance of a new product on the market, the highest price is set for it based on the consumer who is ready to buy the product at that price. The decline in prices takes place after the first wave of demand subsides. This allows you to expand the sales area - to attract new buyers.

This pricing strategy has several advantages:

a high price makes it easy to correct a price error, since buyers are more supportive of a price decrease than an increase;

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

the increased price allows you to restrain consumer demand, which makes some sense, since at a lower price the enterprise would not be able to fully meet the market needs due to the limited production capabilities;

a high initial price contributes to the creation of an image of a quality product among buyers, which can facilitate its implementation in the future when the price is reduced;

the increased price contributes to increased demand in the case of a prestigious product.

The main disadvantage of this pricing strategy is that the high price attracts competitors - potential manufacturers of similar products. The skimming strategy is most effective when competition is somewhat limited. Sufficient demand is also a prerequisite for success.

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

The psychological price strategy is based on setting a price that takes into account the psychology of buyers, the peculiarities of their price perception. Usually the price is set at just below the round sum, and the buyer gets the impression of a very accurate determination of the production costs and the impossibility of deception, a lower price, a concession to the buyer and a win for him. It also takes into account the psychological moment that buyers like to receive change. In fact, the seller wins by increasing the number of products sold and, accordingly, the amount of profit received.

The strategy of following an industry or market leader assumes that the price of a product is set based on the price offered by a major competitor, usually the leading firm in the industry, the enterprise that dominates the market.

A neutral pricing strategy assumes that the pricing of new products is based on actual costs of production, including the average rate of return in the market or industry.

The prestigious pricing strategy is based on high prices for very high quality products with unique properties.

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

the speed of introduction of a new product into the market;

market share controlled by the firm;

the nature of the goods sold (the degree of novelty, interchangeability with other goods, etc.);

payback period of capital investments;

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

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

Pricing strategies for goods sold on the market for a relatively long time can also be guided by different types of prices.

The moving price strategy assumes that the price is established almost directly depending on the ratio of supply and demand and gradually decreases as the market becomes saturated (especially the wholesale price, and the retail price can be relatively stable). This approach to pricing is most often used for consumer goods. In this case, prices and volumes of output of goods closely interact: the larger the volume of production, the more opportunities the enterprise (firm) has to reduce production costs and, ultimately, prices. Given a pricing strategy, it is necessary:

prevent a competitor from entering the market;

constantly take care of improving the quality of products;

reduce production costs.

The long-term price is set for consumer goods. It acts, as a rule, for a long time and is weakly subject to changes.

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

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

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

The strategy of setting prices for products discontinued from production, the production of which is discontinued, does not imply a sale at reduced prices, but an orientation towards a strictly defined circle of consumers who need these goods. In this case, the prices are higher than for ordinary goods. For example, in the production of spare parts for cars and trucks of various brands and models (including discontinued).

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

Choosing a pricing method.

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

Obviously, a correctly set price must fully reimburse all costs of production, distribution and marketing of goods, and also ensure a certain rate of profit. Three pricing methods are possible: setting a cost-based minimum price level; setting the maximum price level generated by demand, and, finally, setting the optimal price level. Consider the most commonly used pricing methods: "average cost plus profit"; ensuring break-even and target profit; setting a price based on the perceived value of a product; setting prices at the level of current prices; sealed envelope method; setting prices on the basis of closed trades. Each of these methods has its own characteristics, advantages and limitations that must be borne in mind when developing a price.

The simplest is the "average cost plus profit" methodology, which consists in calculating a margin on the cost of goods. The amount of the markup can be standard for each type of product or it can be differentiated depending on the type of product, unit cost, sales volumes, etc.

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

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

Another cost-based pricing method aims to generate target profits (break-even method). This method makes it possible to compare the profits obtained at different prices, and allows a firm, which has already determined a profit rate for itself, to sell its product at a price that, under a certain release program, would allow it to maximize the fulfillment of this task.

In this case, the price is immediately set by the firm based on the desired amount of profit. However, in order to reimburse production costs, it is necessary to sell a certain volume of production at a given price or at a higher price, but not less of it. Here, the price elasticity of demand is of particular importance.

Such a pricing method requires a firm to consider different pricing options, their impact on the sales volume required to overcome the break-even level and obtain target profits, as well as analyze the likelihood of achieving all of this at each possible price of the product.

Establishing a price based on the "perceived value" of a product is one of the most original pricing methods, when an increasing number of firms in calculating prices begin to proceed from the perceived value of their products. In this method, costly benchmarks fade into the background, giving way to the perception of goods by buyers. To form in the minds of consumers an idea of the value of a product, sellers use non-price methods of influence; provide service, special guarantees to customers, the right to use the trademark in case of resale, etc. Price then reinforces the perceived value of the product.

Setting the price at the level of current prices. When setting a price taking into account the level of current prices, the firm basically starts from the prices of competitors and pays less attention to indicators of its own costs or demand. It can set a price above or below the price level of its main competitors. This method is used as a price policy tool primarily in those markets where homogeneous goods are sold. A firm selling similar goods in a highly competitive market has very limited ability to influence prices. In these conditions, in the market for homogeneous goods, such as food products, raw materials, the company does not even have to make decisions on prices, its main task is to control its own production costs.

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

The pricing method based on the current price level is quite popular. In cases where elasticities of demand are difficult to measure, firms feel that the current price level represents the collective wisdom of the industry, the guarantee of a fair rate of return. And they also feel that sticking to current prices is about maintaining a normal equilibrium within the industry.

Sealed envelope pricing is used, in particular, when several firms compete with each other for a machine contract. This is most often the case when firms participate in government-announced tenders. A tender is a price offered by a firm, the determination of which is based primarily on prices that can be assigned by competitors, and not on the level of its own costs or the amount of demand for a product. The goal is to get a contract, and therefore the firm tries to set its price below that offered by competitors. In cases where a firm is unable to anticipate the actions of competitors in prices, it proceeds from information about their production costs. However, as a result of the information obtained about the possible actions of competitors, the firm sometimes offers a price lower than the cost of its products in order to ensure the full load of production.

Closed tendering is used when firms compete for contracts during tendering. At its core, this pricing method is almost the same as the method discussed above. However, the price set on the basis of a closed auction cannot be lower than the cost price. The goal pursued here is to win the auction. The higher the price, the lower the probability of receiving the order.

Having chosen the most suitable option from the above methods, the firm can begin to calculate the final price. At the same time, it is necessary to take into account the psychological perception by the buyer of the price of the firm's goods. Practice shows that for many consumers the only information about the quality of a product is contained in the price and in fact the price is an indicator of quality. There are many known cases when the increase in prices increases the volume of sales, and, consequently, production.

Price modifications.

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

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

A discount is a discount or reduction in the price of goods that stimulate payment for goods in cash, in the form of an advance or prepayment, as well as before the deadline.

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

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

Price modification to stimulate sales depends on the goals of the firm, the characteristics of the product and other factors. For example, special prices can be set during any events, for example, seasonal sales, where prices for all seasonal consumption goods, exhibitions or presentations are reduced, when prices may be higher than usual, etc. To stimulate sales, bonuses or compensation can be used to a consumer who bought a product in retail and sent a corresponding coupon to the manufacturer; special interest rates for the sale of goods on credit; warranty conditions and maintenance agreements, etc.

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

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

A stepwise price reduction for the offered assortment of goods is used when the company does not produce individual products, but whole series or lines. The company determines which price steps must be entered for each individual product modification. At the same time, in addition to the difference in costs, it is necessary to take into account the prices of competitors' products, as well as the purchasing power and price elasticity of demand.

Price modification is possible only within the upper and lower boundaries of the set price.