Price setting is a difficult and complex process that requires taking into account a large number of factors. All factors influencing pricing can be divided into two groups - external and internal.

Environmental factors influencing the pricing process.

1. Consumers. Buyers significantly influence the activities of enterprises in the field of pricing. In order to properly respond and take into account their behavior, the company needs to have certain knowledge about the general patterns and characteristics of their behavior in the market. This includes, first of all, psychological aspects buyer behavior: needs, needs, requests, motivation when choosing a product or service, ways of consumption, attitude to goods and services, attitude to the new, consumer sensitivity to prices and quality of goods and services.

In addition to psychological, there are also economic aspects of consumer behavior. This includes concepts such as purchasing power, budget constraints and their relationship to consumer preferences. Due to the fact that the budget of the buyer is limited, and prices are subject to constant changes, the buyer is constantly faced with a choice: how to use his budget in the most rational way, which product to buy and which not. According to the theory of marginal utility and consumer choice, the buyer will prefer the product that best matches his personal idea of the utility of the upcoming purchase, combined with his financial capabilities.

2. Market environment. The market environment is a very complex and multifaceted concept. It is formed under the influence of a large number of economic, political and cultural factors. Usually there are four main market models: pure competition, monopolistic competition, oligopoly, pure monopoly. From the point of view of pricing, the main distinguishing feature of these markets is the degree of influence of the enterprise on the establishment of the market price. The maximum influence is in the condition of monopoly, the minimum - in the conditions of the market perfect competition. The price in the market can be controlled by an individual firm, a group of firms, the state and the market.
3. Members of distribution channels. Product distribution is a process that ensures the delivery of goods to the final consumer. It is known that there are three main types of distribution channels:

direct - goods and services are delivered to the final consumer without the participation of intermediaries;

indirect - goods and services are delivered to the final consumer with the help of one or more intermediaries;

mixed - combine the features of the first two types of channels.

From the point of view of pricing, the influence of the participants in the distribution channels on the increase in prices is of interest. The more intermediaries there are between the manufacturer of the product and its final consumer, the more the retail price will be higher than the selling price, the initial price of the enterprise - the manufacturer of this product. Ultimately, this leads to a restriction in demand for goods and services, which, in turn, stimulates price reductions and thus contributes to the optimization of distribution channels. At the same time, in the case of a multiplier effect, the situation may be exactly the opposite - in the process of price growth, the phenomenon of unlimited demand will be observed, since an inflationary price-wage spiral will set in motion.

4. State. There are three degrees of government influence on pricing
4.1 Fixing prices. The state uses the following main methods of fixing prices - the use of price lists. Price lists for goods and services is an official collection of prices and tariffs, approved and published by ministries, departments, government bodies pricing. Usually, the prices of monopoly enterprises are subject to regulation with the help of price lists: electricity, gas, oil, utilities, transport. Prices for these products cause a multiplier effect in the economy, so their fixation at a certain level contributes to the stabilization of the entire economic situation and determines the degree of price stability in all other areas. Fixing prices at a level above the market price leads to a state of excess supply in the market, fixing prices at a level below the market price - to a shortage.

fixing monopoly prices. The state fixes the prices of enterprises that occupy a dominant position in the market, which allows it to decisively influence competition, market access and price levels, which ultimately limits the freedom of action of other market participants. By Russian legislation the enterprise occupies a dominant (monopoly) position if its market share is from 35% to 65%;

freezing prices. This approach is used in case of disproportions in prices or crisis situations in the economy and is carried out solely for the purpose of stabilizing the situation. It is considered expedient to apply price freezes only in the short term.

4.2 Price regulation through price caps

(setting an upper or lower price limit), the introduction of fixed coefficients in relation to list prices, the establishment of marginal markups, the regulation of the main parameters that affect the formation of prices (the procedure for forming costs, the maximum profit margin, the size and structure of taxes), the establishment maximum size one-time price increases, determination and regulation of prices for products and services of state-owned enterprises.

4.3 Regulation of the system of free pricing through legislative regulation of pricing

activities of market participants, restriction unfair competition. This method of state influence on the pricing process consists in the introduction of a number of prohibitions:

ban on dumping - a ban on the sale of goods below the cost of its production in order to eliminate competitors. It is especially important if there is a leader in the market, seeking to force competitors out of the market or prevent their entry into this market.

a ban on vertical price fixing - a ban on manufacturers to dictate their prices to intermediaries, wholesalers and retailers.

ban on horizontal price fixing - a ban on the agreement of several manufacturers to maintain product prices at a certain level, if the aggregate market share of these enterprises will provide them with a dominant position in the market. This limitation is especially relevant in an oligopolistic market. However, it is easy to ignore it, for example, if an oligopolistic enterprise agrees among themselves not on a single price, but on a single method for calculating costs and determining the price of final products.

Internal factors should also be taken into account when pricing. The most important place among these factors is the cost. It is necessary to compare the amount of costs with the possibility of covering them when setting the price. The survival of the company depends on the extent to which not only current costs are covered, but also the costs associated with capital investments designed for a long period.

Factors of the internal environment influencing the pricing process:

Production cost

Need to cover long-term capital investments

Quality of materials and labor

Labor intensity of production

Using limited resources

In practice, when pricing, enterprises take into account information about both the market (external factors) and costs (internal factors).

Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

Posted on http://www.allbest.ru/

Federal Agency for Education

State Educational Institution "St. Petersburg State Polytechnic University"

Cheboksary Institute of Economics and Management (branch)

department accounting, analysis and audit

Test

on pricing

Option 20

Completed by a student

Correspondence department

2 courses 080105sh / specialty

Finance and credit

Pavlova Nadezhda Anatolievna

Checked by teacher

Evgrafov O. V.

Cheboksary 2010

1. The price system and the law of supply and demand. Influence of supply and demand dynamics on price levels

2. The concept and types of elasticity of demand

3. State regulation prices

Bibliography

1. The price system and the law of supply and demand. Influence of supply and demand dynamics on price levels

demand supply pricing

The economy has many different types of prices that form a system that is in constant development, flexible and dynamic, due to constantly changing conditions for the production and marketing of products and goods. The prices that make up the system are closely interconnected and interdependent.

First, they are formed on a single methodological basis. The methodology is understood as a set of general principles, rules and methods of pricing. The pricing methodology is the same for all levels of management (enterprise, industry, sphere of commodity circulation), so it does not depend on who sets prices and for what period. Availability methodological basis - necessary condition the creation of a price system, this is a pricing strategy for the entire economic complex, involving the development of a pricing concept, a mechanism for its implementation and the creation of a management system for this process.

One of the important methodological elements is the principles of pricing, which are permanent basic provisions that determine the nature of the formation of the price system. AT economic literature distinguish the following basic principles: scientific character, target orientation, continuity, unity of pricing and control.

The price system is characterized by such indicators as level, structure, dynamics.

Price level - absolute quantitative expression of the price in money.

Price structure - this is the ratio of individual elements (cost, profit, taxes, allowances) in the price, that is, their share in its total value, taken as 100 percent.

Price dynamics represents the direction of change in price levels (increase, decrease, rate of change).

Prices are classified according to various criteria and, depending on what principle of classification is taken as a basis, they are divided into types and varieties.

The offer of a good or service is the willingness of a producer to sell a certain quantity of a good or service at a certain price in a certain period of time.

Supply is the quantity of a good or service that sellers are willing to sell at a given price over a given period of time.

The relationship between volume and supply price is expressed in the law of supply.

Law of Supply: Other things being equal, the quantity supplied of a good increases if the price of a good rises and vice versa.

A change in the volume of supply occurs if all factors determining the supply of a product remain constant, and only the price of the product in question changes. Thus, if the price changes, then there is a movement along the supply line.

When other factors that determine the supply change, and the price of the goods is constant, the supply itself changes, and the supply line on the graph shifts.

Factors influencing offers:

change in prices for factors of production;

· technical progress;

· seasonal changes;

taxes and subsidies;

Manufacturers' expectations

Changes in prices for related products.

Demand for a product or service is the desire and ability of a consumer to buy a certain amount of a product or service at a certain price in a certain period of time.

Distinguish:

- individual demand is the demand of a particular subject;

- market demand is the demand of all buyers for this product.

Demand is the quantity of a good or service that consumers are willing to buy at a given price over a given period of time.

A change in quantity demanded is a movement along the demand curve. Occurs when the price of a good or service changes, other things being equal.

Law of demand: ceteris paribus, as a rule, the lower the price of a product, the more the consumer is willing to buy it, and vice versa, the higher the price of a product, the less the consumer is ready to buy it.

Factors affecting demand:

consumers' income

tastes and preferences of consumers;

prices for interchangeable and complementary goods;

Stocks of goods at consumers (expectation of consumers);

· product information;

time spent on consumption.

With a change in other factors and a constant price of the goods, a change in the demand itself will occur. On the graph, when demand changes, the demand curve shifts.

A shift in the demand curve is caused by a change in one or more variables that affect the shape of the demand curve. As a result of a change in demand, consumers are willing to buy more (or fewer) goods than before at the same price, or are willing to pay a higher price for the same quantity of goods.

2. The concept of elasticity of demand

Supply and demand depend on many factors. Their change entails a corresponding change in supply and demand. This is the concept of elasticity.

Elasticity is a measure of the response of one economic variable to a change in another. AT economic theory consider the elasticity of supply and demand. The elasticity of demand for a good is the percentage of a change in price or income and a change in demand.

Price elasticity of demand

It shows the extent to which the consumer reacts to price changes. When measuring the percentage change in economic values, the usual method of calculation is not applicable, since the same quantitative change in the other direction gives a different percentage. For example, if the quantity demanded for a good was 10,000 units and then decreased by 2,500, then there was a 25% change in demand. However, an increase in demand for a given commodity from 7,500 units to 10,000 would result in a 33% increase in demand. Therefore, in economic theory, a more universal method is used, called the Allen midpoint formula.

There are several types of price elasticity of demand, depending on the value of the elasticity coefficient.

E > 1 - elastic demand (for luxury goods);

E< 1 - неэластичный спрос (на предметы первой необходимости);

E = 1 - demand with unit elasticity (depends on individual choice);

E = 0 - perfectly inelastic demand (salt, medicines);

E - perfectly elastic demand (in a perfect market).

One cannot speak of elastic or inelastic demand curves, since the elasticities are valid for individual points on the demand curve. On each such demand curve, as a rule, there are points with elastic and inelastic demand. As an exception, only perfectly elastic and perfectly inelastic demand curves are considered, on which each point represents the same elasticity.

Income elasticity of demand

This is a numerical parameter that shows how the consumer reacts to changes in his income while prices remain unchanged.

The value of income elasticity is closely related to the concept of normal goods and goods of inferior quality. For normal goods, an increase in income causes an increase in demand. Since in this case income and demand change in the same direction, the income elasticity of demand is positive. Conversely, for inferior goods, an increase in income causes a decrease in demand. Income and demand move in opposite directions, so the income elasticity of demand is negative in this case. For certain groups of goods (salt, matches), demand does not increase with an increase in income, elasticity is zero.

3. Gostate regulation of prices

The influence of the state on pricing processes has become one of the important and systematically applied methods of economic policy in developed countries.

The existing system of state regulation of prices, along with other forms of sectoral state policy, affects the cost proportions and distribution of national income between individual sectors and categories of the country's population. The role of this form of regulation has sharply increased in recent decades due to rising inflation. Pricing becomes one of the most important areas economic activity states. Integral part This policy should be considered as attempts by the state to influence the state of the economic situation in individual commodity markets through price regulation. Price regulation is becoming a widespread state practice.

Under these conditions, state regulation in the field of prices usually pursues the following goals:

1. To slow down the inflationary rise in prices as a result of the depreciation of money during the war period, to eliminate price disproportions for certain types of goods and services.

2. Achieve the necessary ratios in the development of production.

3. Make it difficult to grow wages, which increases in proportion to the increase in prices.

4. Subsidize state-controlled production, protect backward sectors of the economy from foreign competition (primarily agriculture), and promote foreign economic activity.

5. Mobilize the budgetary funds necessary for the implementation of socio-economic activities.

Some economists argue that the regulation of the price side of the state in market conditions is unacceptable. However, the experience of countries with a market economy convincingly shows that the state has not withdrawn and is not withdrawing from control over prices in the domestic market, but solves these problems by methods inherent in the market mechanism.

State regulation of prices is an attempt by the state, through legislative, administrative and budgetary and financial measures, to influence prices in such a way as to promote stable development. economic system in general, i.e. to neutralize cyclical fluctuations in reproduction processes through prices. Depending on the specific economic situation, price regulation is of an anti-crisis and (or) anti-inflationary nature.

It is known that the price system is one of the most important elements of a market economy, and it is naturally connected with other elements of the market mechanism and reacts to their changes. State regulation of the economy through changes in budget expenditures, taxes, interest rates for loans and other economic levers is manifested in changes in costs and product prices and affects reproduction processes.

In Russia, in conditions of a serious imbalance in the economy, the role of the state is to create market structures in order to ensure normal conditions for the development of the market: the formation of entrepreneurship, the adoption antitrust law etc. The conduct of the state, in particular, antimonopoly policy should ensure the removal of artificial restrictions and the deployment of competition in all industries and sectors of the economy, its support and all kinds of encouragement and the development of market pricing on this basis.

It should be noted that price liberalization does not weaken, but rather enhances the role of the state in the implementation of pricing policy. It does not consist in setting specific prices, but in influencing, with the help of economic measures, the adoption of optimal decisions by commodity producers on prices, in providing them with methodological and methodological assistance, and in developing legal norms for pricing.

The goals of state regulation are to prevent an inflationary rise in prices as a result of a steady shortage, a sharp increase in prices for exploited raw materials and fuel, monopoly of producers, and to create normal competition that promotes the introduction of scientific and technological progress into production. An important task is to achieve certain social outcomes, in particular, maintaining a decent living wage, providing people with the opportunity to purchase essential goods in sufficient quantities.

Measures of influence on producers from the side of the state can be as direct- by setting certain pricing rules, and indirect- through such economic mechanisms as the financial and credit mechanism, remuneration, taxation, etc.

With direct methods of price regulation, the state directly affects prices by regulating their level, setting profitability standards or standards for the elements that make up the price, or by other similar methods.

Indirect methods of price regulation include the regulation of the discount rate of interest, taxes, incomes, the level of the minimum wage, etc. These methods are manifested in the influence of the state not on the prices themselves, but on the factors that affect pricing, which are of a macroeconomic nature.

Optimal is a flexible combination of direct and indirect methods of price regulation by the state.

As a rule, the state directly regulates prices for those types of products and services that form the framework of the price system. These are prices for energy carriers, transport and communication services, housing and communal services, etc., which have a significant impact on the entire economy of the country. By setting and regulating prices for these goods and services, the state has a decisive influence on the entire price system.

Direct state regulation implies the need to correct the market and supplement the market mechanism with the centralized state policy by controlling the most important market parameters. In the conditions of an imperfect market economy, which takes place in Russia, the emerging equilibrium price does not contribute to achieving stability in the economy. Therefore, the state, through the establishment and regulation of prices, must purposefully create conditions for equilibrium.

By pursuing an active pricing policy, the state can ensure the profitability of a business that is unprofitable for a purely market economy (long-term scientific and technical programs, military-industrial complex , transport, communications, utilities, etc.). A similar result can be achieved both through the use of contractual prices, and through the placement of government orders and purchases.

Of course, with excessive state regulation of prices, market mechanisms weaken and there is a danger of losing market benchmarks for comparing costs and results, since the main market parameters are strongly influenced by non-market factors. The price, which is not related to a competitive market and is set by the state, cannot change quickly enough depending on changes in supply and demand. In this case, as in a planned economy, either a shortage or an overstocking of the market with unmarketable goods is formed.

In the event of a complete withdrawal of the state from participation in the formation of prices and their regulation, the foundations of the economy are destroyed, the state loses one of the most important methods of combating monopoly, and market relations and financial position many enterprises become quite unstable.

In a market economy, both excessive enthusiasm for the establishment and regulation of prices by the state, and complete failure from such regulation, primarily in relation to the products of efficient, but competitive monopoly enterprises. In the period of transition for society, the need for direct state regulation of prices increases.

State regulation of prices is also carried out by guaranteeing producers the level of selling prices and by subsidizing production costs.

Price regulation by subsidizing production costs in order to increase labor productivity in agriculture implies the provision of government subsidies to producers for the purchase of fertilizers, agricultural machinery, the purchase of high-quality seeds, land reclamation, etc.

In addition, the state maintains the ratio between the prices of agricultural products and goods purchased by farmers. This function is carried out by the Ministry of Agriculture.

Along with the methods of direct regulation of prices, the state carries out indirect regulation, i.e. affects the pricing process and a number of indirect measures. Such measures have been used in Western European countries since the beginning of the 20th century, when inflationary price increases became a stable trend. Measures of indirect price regulation, as a rule, are aimed at changing the market situation, at creating a certain position in the field of financing, currency and tax transactions, and in general - at establishing an optimal balance between supply and demand.

Methods of indirect price regulation include state procurements, the tax system, the regulation of money circulation and credit, the policy of public investment and the regulation of public spending, the establishment of depreciation rates, etc. With these measures, the state seeks to establish a balance between supply and demand and thus contribute to a more even and slow price growth throughout the economy. Indirect Methods price controls are manifested in the impact not on the prices themselves, but on the factors influencing pricing, factors that are of a macroeconomic nature.

State regulation of prices varies depending on the state of the economy. It intensifies in crisis situations - during periods of accelerated inflation, growing scarcity of certain products, the need for rapid economic restructuring, and weakens as the country emerges from the crisis.

In countries with dynamic, balanced market economies, prices are regulated to a lesser extent than in countries with unbalanced and unstable economies. As the economy stabilizes, the scope of state regulation is reduced and there is a gradual transition to free pricing.

As soon as conditions for competition are created in the market, state regulation of prices is often cancelled.

The tax system has a significant impact on the level and dynamics of prices. Price dynamics and inflation rates directly depend on the size of taxes. The higher the taxes, the faster prices rise, the wider the inflationary scope. Any manufacturer tries to transfer the tax through the price of goods to the consumer. At the same time, the state, receiving big income increases its costs. Hence, in order to reduce inflation, slow down the rise in prices, the state must reduce tax rates. Modern tax policy in the developed countries of the world is directed towards lower taxes. In the United States, for example, the share of income taxes in federal budget revenues does not exceed 8%, while in Russia it was about 20% until recently. The latest measures of the Government of the Russian Federation are aimed at reducing the tax burden, primarily for manufacturers of goods.

Direct methods of price control should not be opposed to indirect ones, but combined with them. The general anti-inflationary policy and related measures to indirectly influence pricing processes in this case are supplemented by direct methods of state regulation. The state, by establishing certain modes of price movement, by “freezing” or “blocking” them at a certain level, by means of control over individual items of production costs, interferes in the decisions of enterprises and firms regarding the level of prices for products.

The effectiveness of various pricing methods depends on right choice conditions for their use. The method of price regulation through the level of profitability to production costs, which has become widespread in our economy, is practically not used in world practice, since enterprises are not interested in reducing production costs. At the same time, the level of prices abroad is regulated through restrictions on obtaining increased profitability on invested capital.

The effectiveness of state price regulation largely depends on its interaction with other measures of influence on the economy. Thus, price blocking, the introduction of fixed prices, changes in income tax rates, as a rule, should be combined with wage regulation.

As already noted, one of the important areas of state price regulation is price control for the products of monopoly enterprises. At the same time, state regulation of prices for products manufactured by monopoly enterprises was introduced in order to prevent, limit and suppress violations of state price discipline and abuses associated with the dominant position of goods on the market.

Monopoly enterprises are controlled in terms of their compliance with existing rules pricing and justification for making a profit on the range of goods for which these enterprises are monopolists.

At the same time, control is exercised by federal or local authorities which are entrusted with the functions of price regulation and control over their application.

Products subject to state price regulation are sold by monopoly enterprises at regulated prices. Free market prices are set for other products, goods and services.

If enterprises-monopolists violate the antimonopoly legislation, expressed in unreasonable overstatement of free prices for their products, state regulation of prices is applied to their goods.

In cases where monopoly enterprises violate state price discipline, they are subject to economic and administrative measures provided for by the Law of the Russian Federation “On Competition and Restriction of Monopolistic Activities in Commodity Markets”. Such measures include the transfer to the budget income received from the overstatement of prices and tariffs, as well as fines in the same amounts.

AT Russian Federation a certain procedure for applying economic sanctions for violating state price discipline has been developed and is in effect, aimed at strict compliance by all Russian enterprises with the current legislation and other normative documents by pricing. Thus, economic sanctions are applied to enterprises that have committed violations of state price discipline in the sale of products, goods and services and received excessive amounts as a result of this, consisting in the indisputable withdrawal of these amounts from the profits of enterprises to the budget. In the same amount, an additional fine is collected from the enterprise.

Violations of state price discipline, in particular, include:

Overstatement of state-regulated prices and tariffs for goods and services, including fixed prices and tariffs, marginal levels of profitability, marginal price and tariff increase coefficients;

Overstating the established allowances (margins) to prices and tariffs, charging unforeseen allowances, as well as failure to provide established discounts;

The use of free wholesale (selling) prices, tariffs, markups and allowances that are not agreed with consumers in the prescribed manner;

Overpricing of products for which, due to design or technological shortcomings, consumer properties have not been achieved, adopted when agreeing on their level, etc.

Control over compliance with state price discipline in all sectors of the Russian economy is carried out by the Price Inspectorate of the Price Department of the Ministry of Economic Development and Trade of the Russian Federation and the pricing and price control bodies of the republics within Russia, territories, regions, autonomous entities, cities of Moscow and St. Petersburg. In trading establishments and Catering price control is also carried out by the bodies of the State Inspectorate for Trade, Quality of Goods and Consumer Rights Protection in accordance with the established procedure.

An enterprise that independently revealed a violation of state price discipline and received excessive amounts as a result, regardless of its financial condition contributes them to the budget at the expense of profit, which usually remains at the disposal of the enterprise after paying taxes and other obligatory payments. At the same time, it is mandatory for this enterprise is a simultaneous reduction in the price of their products, goods and services.

The amounts received as a result of violation of state price discipline and subject to withdrawal to the budget revenue are determined as the difference between the actual proceeds from the sale of products, works and services at inflated prices and tariffs and the cost of these products, works, services at prices and tariffs, formed in accordance with with current legislation.

For monopoly enterprises, as well as for other enterprises, for the products of which marginal levels of profitability are established, the amounts received by exceeding the marginal level of profitability as a whole for groups or types of products, goods and services are subject to withdrawal.

Price control with the application of economic sanctions for violating state price discipline applies to all business entities located on the territory of Russia, including enterprises with foreign investment engaged in production, trade and other commercial activities.

It should be noted the urgent need for direct state control, primarily over monopoly markets. Where a state monopoly is recognized as natural, for example, in the defense industry, fundamental science, etc., real, full-scale administration is appropriate. These are both current and long-term planning of production, costs and prices, and direct control over the quality and consumer properties of goods and services, and guaranteed material and technical supply, and centralized public procurement. It is quite acceptable to regulate the markets of those goods of inelastic demand that belong to the monopoly of the state. It can be implemented through the introduction of hard excise rates, price planning or some other means.

World practice knows many combinations of various methods of market regulation. Some methods - both economic and administrative - play the role of a supporting structure in state policy and are aimed at achieving the set goals, while others act as shock absorbers and are designed to dampen the negative effects that inevitably accompany state regulation of a market economy.

Bibliography

1. Digest of economic theory // Sokolinsky V.M., Vasilyeva E.N. -M., Analytics-Press, 1998

2. Pricing: tutorial// Salimzhanov I.K., Portugalova O.V.-M., Finstatinform, 1996

3. “Price policy and impact on economic processes” // Economist No. 5 1998

4. Pricing: textbook // Shevchuk D. A. // 2008.

Hosted on Allbest.ru

...

7. Marketing Pricing Solutions

7.1. Factors Affecting Pricing

All the main factors influencing pricing are grouped as follows.

Factors controlled by the firm:
- product life cycle;
- portfolio of goods (services);
- segmentation and positioning of goods (services);
- use of trademarks.

Consumer driven factors:
- requirements;
- benefits;
- usefulness;
- distribution channels.

Market factors:
- competition;
- environment.

The product life cycle is not usually a useful guide to pricing policy. The firm's portfolio appraisal approach is suitable for those who have a market position and adequate financial resources.

When determining a pricing policy for a range of products, consider:
- interaction of consumer requirements (the price of one product can affect the consumption of another - for example, computers and software);
- interaction of costs (sometimes products are made on the same equipment or are the result of the same production processes).

In the case of particularly fierce price competition, the first thing to consider is whether segmentation would provide adequate protection.

If there are important and significant benefits for the consumer, then he is ready to pay in addition to the “regular price” also the “premium price”. These benefits are expressed in the utility that the consumer sees in the product. Theoretically, it should be balanced with the asking price.

The main factor affecting the price, of course, is competition. Undoubtedly, both economic and political conditions affect the consumption of certain goods, and, consequently, the equilibrium market price of goods. Where transportation costs are significant, the geographic location of the consumer and supplier can be a significant factor influencing the price.

7.2. Pricing for new products

Pricing for new products is closely related to the strategy for bringing a new product to market. Four main strategies can be considered:

A: Quick “skimming” : a new product is released at a high price and high level promotion.

It is advisable to use under the following circumstances:
- most of the market does not expect the product;
- the market needs a product and is ready to pay a high price for it;
- the company is ready for potential competition and wants to play on the advantage of the brand.

B: Slow “cream skimming”: high price and low level of promotion.

Terms:
- the market is limited in size;
- the market is aware of the product;
- buyers are willing to pay a high price;
- Potential competition is expected.

B: Rapid penetration: low price and enhanced promotion.

This is beneficial in the following cases:
- the market is limited in size;
- the market is not aware of the product;
- most buyers are price sensitive;
- there is strong potential competition;
- the cost of production falls with the scale of production and the experience of the firm.

G: Slow penetration: low prices and low promotion.

This is useful under the following conditions:
- big market;
- good knowledge of the product;
- price sensitivity;
- some potential competition.

Sales volume, which is consumer approval of a product, is actually a function of the offer price. Profit from the sale of a unit of production is the difference between the price and the cost of production. If the costs of the manufacturer, in principle, can completely manage, then when setting the price should take into account the price level of competing products.

Principal limits for setting a price by a firm on new products include the cost of manufactured products as the lower price limit, and the upper limit is determined by the consumption price, which makes the product attractive to the consumer compared to those available on the market. Thus, the upper limit of the price is directly determined by the indicators of the technical quality of the product (its productivity, quality, reliability, operating costs for its use, etc.). Choosing a price near the lower limit, the manufacturer increases the attractiveness of the product, and in the case of a price approaching the upper limit, the company increases its profit, but reduces the economic attractiveness of the product for the consumer. In fact, the price for the consumer should be a tool for assessing economic effect from the use of products, taking into account the cost of its consumption (acquisition price plus operating costs for the entire period of operation). Thus, the firm cannot evaluate the project by the pricing factor without taking into account the market situation and forecasts of the acceptable consumption price for potential buyers. This problem is closely related to the assessment of the possible degree of competition at the time of the beginning of the commercial sale of the goods, and not today's competition, as is often done.

7.3. Practical pricing policies

Competitiveness is assessed by integral indicators technical I tp, economic Iep, and organizational parameters in the coefficient of competitiveness of a new product

As an integral economic indicator may be the consumption price - the sum of the selling price and all operating costs for the life of the product. The pricing policy depends on the type of market, the tasks of the enterprise, socio-political and economic conditions.

Pricing objectives may include:
- Ensuring the survival of the company;
- maximization of current profit;
- gaining leadership in controlled market share;
- gaining leadership in product quality.

A. Survival becomes a primary goal when there is intense competition or a sudden change in customer needs. In this case, prices are set at the level of the price of production or, in extreme cases, at the level of costs. Original production price

where: C - the amount of costs,
H is the average rate of return,
K - advanced capital.

B. The task of maximizing the current profit leads to the original price

where H" is the maximum rate of return under given market conditions.

C. With the task of leading in terms of a controlled market share, an enterprise should go for the maximum price reduction, compensating for costs due to the large mass of goods sold.

D. In the task of leading in quality, the price must be set high in order to cover the high costs of R&D. Goods should be intended for highly affluent customers.

The price strategy when introducing a product to the market was discussed earlier. When choosing a pricing method, the minimum possible price is determined by the cost of production, the maximum possible - by the availability unique opportunities goods, the average level - the prices of goods-competitors and goods-substitutes.

There are different ways to implement pricing strategies.

A. Establishing standard and variable prices.

In the case of standard prices, the firm goes to reduce packaging, change the composition of the goods, and not prices. In variable pricing, the firm deliberately changes prices to respond to costs or demand. Different prices may apply for different market segments.

B. Flexible pricing allows bargaining. At the same time, merchant commissions also change.

B. Unrounded Price Strategy.

D. Price leadership for key products: selling them at prices below cost or selling them at prices below normal prices.

D. Discounts for bulk purchases.

E. Price Lines: The price range must contain prices that are far enough apart or they will buy at the lowest price. Prices should be especially separated at the top of the range, and the ratio of prices should change as costs change.

G. Selective pricing.

In some cases, different prices are applied for the same product (service). The supplier applies different prices for goods of different brands, different packages, prices for different groups consumers, special peak tariffs are used (transport, electricity consumption), price changes depending on the level of service. All this is done on the assumption that price is the most important variable in the marketing mix.

Usually different prices are realized through a system of discounts:
- trade discounts(payment of costs in distribution channels);
- discounts on sales volume;
- discounts for cash payments;
- seasonal discounts;
- prices in the interests of promotion;
- individual pricing;
- psychological pricing (for example, high initial prices, but then dropping prices in large volumes - creating the illusion of large discounts).

Behavior and policy when prices rise are very important. The following practical recommendations are available:
- raise prices when others do otherwise (don't go back for competitive success; you will increase them under certain circumstances and these actions will then be more visible),
- do not do it all at once, increase gradually, which is less noticeable,
- do not do this often (customers react to frequent changes),
- when raising the price, try to increase something (for example, the level of service, product quality),
- pay attention to your key costs (remember the 80-20 rule),
- Explain aloud and truthfully what happened.

Before all commercial and many non-profit organizations as one of the main problems of determining the price of their goods and services. In market conditions, pricing is a very multifaceted process, influenced by many factors.

The main of these factors are the following:

1. Demand for products. Demand has a significant impact on price. The higher the price of a product, the fewer products offered at that price can be purchased by buyers. The relationship between price and demand is described by the demand curve, which shows the inverse relationship between the price of a good and the demand for it. If the demand curve falls when prices rise, then the supply curve, on the contrary, rises. This is explained by the fact that the increase in prices is of interest to manufacturers in increasing sales volumes. The price at which supply and demand are equal is called the equilibrium price. This is the price at which the product will be sold. In fact, the ratio of supply and demand is constantly changing as a result of the impact on them of various factors.

To quantify fluctuations in supply and demand under the influence of various factors, the concept of elasticity is used. Elasticity gives an idea of the extent to which a change in price affects the level of demand.

Demand for various goods can be either elastic or inelastic. Inelastic demand goods include, for example, everyday goods, relatively inexpensive goods. In addition to elastic and inelastic demand, there is a special case when a percentage change in price leads to exactly the same change in sales and total revenue remains unchanged.

2. State regulation of prices. In an imperfect market, the emerging equilibrium price does not contribute to the optimal state and stability in society. Therefore, the state, through the establishment of regulated prices, purposefully creates new conditions for equilibrium. However, the following must be taken into account:
- The price set by the state cannot change quickly enough under the influence of changes in supply and demand, so there may be a shortage or overstocking of products;
- · a complete rejection of interference in the pricing process deprives society of the opportunity to influence the price level of industries and enterprises.

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 credit; to discuss the prices, allowances and costs of any firms at professional industry meetings; negotiate with competitors to temporarily reduce production in order to maintain high prices.

The violation pursued by the law is also "vertical price fixing". It manifests itself in the fact that manufacturers or wholesale require the sale of their goods at specific prices, thus controlling retail prices. The state also prohibits price discrimination if it harms competition. Thus, manufacturers and wholesalers are obliged to offer their goods to different buyers - participants in the distribution channels on the same terms.

3. Production and sales costs. The price of a product is based on the costs associated with its production and sale, so their size largely determines the price level. The composition of the costs includes costs both dependent (the level of use of raw materials and materials, the degree of utilization of production capacities, labor productivity), and independent (transportation tariffs, the cost of raw materials, materials, raw materials) from the activities of the enterprise.
4. Price competition. Competition pushes firms to improve their products, a detailed justification of the price of it. In this case, the firm can focus either on the seller's market or on the buyer's market. In the seller's market, the dominant position is occupied by the seller - the manufacturer of the goods. Under these conditions, it is easier for the firm to function, since its products are out of competition. In the buyer's market, the buyer dominates. And how well the company will be able to take into account the changing needs of the buyer and satisfy them in time depends on its well-being.

Price competition affects the price of a product through factors such as sectoral characteristics of production (for example, capital or labor intensive); product life cycle (at what stage life cycle goods are located); type of product (for example, serial or single); company image; volume of deliveries; relationship between the seller and the buyer (the nature of the relationship may be determined by the contract); payment terms.

5. State financial system, namely: the level and trends in the income of the population, the purchasing power of the monetary unit, the level and dynamics of inflation, changes in the parity of the national currency, etc.
6. Members of distribution channels. 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.

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 agreements, including discounts on the price for a certain period or a free lot of goods to stimulate purchases by wholesalers and retailers.

7. Consumers- an important factor that has a significant impact on prices. Any entrepreneur must see the deep relationship between price and how different consumers perceive it. The relationship between prices and the number of purchases made at these prices can be explained by two reasons: the influence of the laws of supply and demand and price elasticity and the unequal reaction of buyers in different market segments to price. It was these reasons that formed the basis for dividing all buyers according to their perception of prices and orientation in purchases into four groups:
- Buyers showing great interest in choosing prices, quality, range of goods offered (this group of buyers is greatly influenced by advertising that reveals additional beneficial features this product), this is the so-called group of economical buyers;
- Buyers who have created for themselves an "image" of the product they want to own and are sensitive to all characteristics that bring them closer or move them away from the "image" are personalized buyers; they require special attention and sensitive service;
- · buyers who support small firms with their purchases and make them according to a long-established tradition, this group of buyers is called "ethical buyers"; they are willing to pay a higher price for the goods sold in this store, sometimes neglecting the wide range of goods in other stores;
- Buyers who are little interested in prices are "apathetic buyers".

Of all the factors listed above, the main impact on the movement of prices is exerted by the dynamics of the price of production of goods. The growth of labor productivity, the reduction in the cost of tools and raw materials per unit of output cause a decrease in the price of production, and vice versa. Therefore, one would expect that with the acceleration of the pace of scientific and technological progress, there would be a decrease in market prices. However, practice shows that in developed countries the achievements of scientific and technological progress do not lead to a decrease in the cost of goods in a number of industries. This is because other factors, such as monopoly policy and inflation, are stronger.

By pursuing a certain policy in the field of pricing, the organization actively influences both the volume of sales and the amount of profit received. As a rule, the organization is not guided by obtaining momentary benefits by selling the product at the highest possible price, but pursues a flexible pricing policy.
The complexity of price management is due to the fact that its formation is influenced by many different factors, not only internal, but also external.
Marketing pricing is influenced by two groups of factors:
1. External (affect the level of demand):
- state of demand,
- market competition.
Four types of markets:
= pure competition - market with a large number sellers, but none of them influence the formation of the market price (wheat);
= monopolistic competition - a market with a large number of sellers and buyers with different prices for one type of product;
= oligopolistic competition - a market with a small number of sellers, each of which is sensitive to the price of other products. It can be either homogeneous (oil) or heterogeneous (auto and PC);
= pure monopoly is a one-seller market. Monopoly can be:
- - state (postal service),
- - private regulated (power supply),
- - private unregulated (Microsoft).
- economic factors: inflation, interest rates, income levels,
- government factors: legislative measures that limit product prices.
2. Internal (have an impact on profit):
- marketing goals of the company:
= company survival in the market becomes main goal when there is a crisis of overproduction, intense competition, a change in the tastes of buyers,
= maximization of current profit - the company determines the reason for the demand and sets the price at which maximum profit occurs,
= market share maximization - low prices,
= quality dominance in the market .
- marketing mix strategy,
- costs determine the minimum price (constant, independent of the volume of production, and variables that depend on it),
- stages of life cycle, - policy of suppliers and intermediaries.
The price is one of the elements of the marketing mix, so the choice of price is determined taking into account the choice of strategies relative to other elements of the marketing mix. For example, the price depends on the quality of the product, the cost of its promotion, and the stage of the product's life cycle.
Pricing policy is strongly influenced by competitors and their possible reaction to price changes in the market. Therefore, studying the prices of competitors is an important element of the activity in the field of pricing. If the price is based on the price of competitors, costs or demand cease to play a decisive role, especially when it is difficult to measure the elasticity of the latter, that is, to determine the impact of price changes on demand.

Factors influence the pricing process. Pricing Factors

Send your good work in the knowledge base is simple. Use the form below

1. The price system and the law of supply and demand. Influence of supply and demand dynamics on price levels

Similar Documents

7. Marketing Pricing Solutions

7.1. Factors Affecting Pricing

7.2. Pricing for new products

7.3. Practical pricing policies

Read also

Castles in medieval Europe A castle is a building (or a complex of buildings) that combines residential and defensive tasks.

Presentation "In the knight's castle" presentation for a history lesson (grade 6) on the topic

Presentation on the topic "how I see the future"

THE BELL