Factors affecting the pricing processes. Internal and external factors of pricing. Classification of pricing decisions

All commercial and many non-commercial organizations face the problem of determining the price of their goods and services as one of the main ones. In a marketplace, 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 the price. The higher the price of a product, the less products offered at that price can be purchased by buyers. The relationship between price and demand for it is described by the demand curve, which shows the inverse relationship between the price of a product and the demand for it. If the demand curve falls as prices rise, the supply curve, on the contrary, rises. This is due to the fact that the increase in prices encourages producers to increase their sales. The price at which supply and demand are equal is called the equilibrium price. This is exactly the price at which the product will be sold. In fact, the relationship between 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 provides an indication of the extent to which price changes affect the level of demand.

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

2. State regulation of prices.In an imperfect market, the resulting equilibrium price does not contribute to the optimal state and stability in society. Therefore, the state, by setting regulated prices, purposefully creates new conditions for equilibrium. However, the following should be considered:
- · The price set by the state cannot change quickly enough under the influence of changes in demand and supply, therefore, there may be a shortage or overstocking of products;
- · Complete refusal to interfere 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. Legislatively restricts attempts to price collusion and the establishment of fixed prices by manufacturers of goods, representatives of wholesale and retail trade.

Regardless of how "reasonable" these fixed prices are, they are illegal. The entrepreneurs who installed them are severely punished, and the companies are subject to huge fines. Such violations are called "horizontal price fixing".

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; subject the prices, markups and costs of any firms to discussion at professional industry meetings; negotiate with competitors to temporarily cut production in order to maintain high prices.

"Vertical price fixing" is also a violation of the law. It manifests itself in the fact that manufacturers or wholesalers 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 distribution channels on the same terms.

3. Production and sales costs.The basis of the price of a product is the costs associated with its production and sale, so their size largely determines the price level. The composition of costs includes costs both dependent (the level of use of raw materials and materials, the degree of utilization of production facilities, labor productivity) and independent (transport 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, to justify their prices in detail. 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. In these conditions, it is easier for a company to function, since its products are out of competition. In the buyer's market, the buyer dominates. And its well-being depends on how much the company is able to take into account the changing needs of the buyer and satisfy them in time.

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 of the product life cycle is the product); type of product (for example, serial or one-off); company image; volume of supplies; the relationship between the seller and the buyer (the nature of the relationship can be determined by the contract); conditions of payment.

5. The state of the financial system, namely: the level and trends of household income, the purchasing power of the monetary unit, the level and dynamics of inflation, the change in the parity of the national currency, etc.
6. Participants in product promotion channels.They all seek to increase sales and profits and to establish greater control over prices. The manufacturing firm influences the price of the goods using a system of monopoly commodity circulation, minimizing the sale of goods through stores selling at reduced prices.

In order to reach 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 costs and generate income; provide guarantees to wholesale and retail trade in receiving products at the lowest prices; offer special consents, including price discounts for a certain period or free consignment of goods to stimulate purchases in wholesale and retail trade.

7. Consumers is an important factor that has a significant impact on prices. Any entrepreneur should see a deep relationship between price and its perception by various consumers. 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 response of buyers in different market segments to the price. It is these reasons that formed the basis for dividing all buyers according to their perception of prices and orientation in purchases into four groups:
- Buyers who show great interest when choosing a purchase to prices, quality, assortment of goods offered (advertising that reveals additional useful properties of this product has a great influence on this group of buyers), this is the so-called group of thrifty buyers;
- · Buyers who have created a "image" of the product they want to own and are sensitive to all the characteristics that bring them closer or further 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 of other stores;
- · Buyers with little interest in prices are "apathetic buyers".

Of all the factors listed above, the dynamics of the price of production of a good has the main impact on price movements. An increase in labor productivity, a decrease in the cost of instruments of labor 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 will be a decline 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 policies and inflation, are stronger.

For an effective business organization, you need to have a clear understanding of what the price is, pricing factors, what are the principles of pricing for goods and services. Let's talk about how and what the prices are composed of, what functions they perform and how to correctly determine the adequate cost of products.

Price concept

The basic element of the economic system is price. This concept intertwines various problems and aspects that reflect the state of the economy and society. In its most general form, the price can be defined as the number of monetary units for which the seller is ready to transfer the goods to the buyer.

In a market economy, the same goods can cost differently, and the price is an important regulator of the relationship between market entities, an instrument of competition. Its value is influenced by many pricing factors, and it consists of several components. The price is variable and subject to permanent changes. There are several types of prices: retail, wholesale, purchasing, contractual and others, but all of them are subject to a single law of formation and existence in the market.

Price functions

A market economy differs from a regulated one in that prices in it have the ability to freely exercise all their functions. The leading tasks, which are solved with the help of prices, can be called stimulation, information, orientation, redistribution, balancing supply and demand.

The seller, announcing the price, informs the buyer that he is ready to sell it for a certain amount of money, thereby orienting the potential consumer and other traders in the market situation and informing them of his intentions. The most important function of establishing a fixed cost of a product is to regulate the balance between supply and demand.

It is with the help of prices that manufacturers increase or decrease the quantity of products produced. A decrease in demand usually leads to an increase in prices and vice versa. At the same time, pricing factors are a barrier to discounts, since only in exceptional cases can producers lower prices below the cost price level.

Pricing process

Price fixing is a complex process that is influenced by various phenomena and events. It is usually carried out in a specific order. First, the pricing goals are determined, they are closely related to the strategic goals of the manufacturer. So, if a company sees itself as an industry leader and wants to occupy a certain market segment, it seeks to establish competitive prices for its goods.

Further, the main pricing factors of the external environment are assessed, the features and quantitative indicators of demand, market capacity are investigated. It is impossible to form an adequate price for a service or product without assessing the cost of similar units from competitors, therefore the analysis of competitors' products and their cost is the next stage of pricing. After collecting all the "incoming" data, you need to choose the methods of pricing.

Usually a company has its own pricing policy, which it adheres to over a long period. The final stage of this process is the final setting of the price. However, this is not the final stage, each company periodically analyzes the established prices and their compliance with the tasks at hand, and according to the results of the research, they can reduce or increase the cost of their goods.

Principles of pricing

Establishing the cost of a product or service is not only carried out according to a certain algorithm, but is also carried out on the basis of basic principles. These include:

The scientific principle is not taken "from the ceiling", their establishment is preceded by a thorough analysis of the external and internal environment of the company. Also, the cost is determined in accordance with objective economic laws, in addition, it should be based on various pricing factors.
The principle of focus. Price is always a tool for solving economic and social problems, so its formation should take into account the tasks set.
The pricing process does not end with the establishment of the value of the goods in a specific time period. The manufacturer monitors market trends and changes the price in accordance with them.
The principle of unity and control. Government authorities constantly monitor the pricing process, especially for socially significant goods and services. Even in a free, market economy, the state is assigned the function of regulating the cost of goods, to the greatest extent this applies to monopolistic industries: energy, transport, housing and communal services.

Types of factors affecting the price

Everything that affects the formation of the value of a product can be divided into external and internal environment. The first includes various phenomena and events that a product manufacturer cannot influence. For example, inflation, seasonality, politics and the like. The second includes everything that depends on the company's actions: costs, management, technology. Also, the pricing factors include factors that are usually classified by subjects: manufacturer, consumers, government, competitors, distribution channels. Costs are distinguished into a separate group. They directly affect the size of the cost of production.

There is also a classification within which three groups of factors are distinguished:

not opportunistic or basic, i.e. associated with a stable state of the economy;
opportunistic, which reflect the variability of the environment, these include factors of fashion, politics, unstable market trends, tastes and preferences of consumers;
regulating, related to the activities of the state as an economic and social regulator.

Basic system of pricing factors

The main phenomena affecting the cost of goods are indicators that are observed in all markets. These include:

Consumers. Price is in direct proportion to demand, which, in turn, is determined by consumer behavior. This group of factors includes such indicators as price elasticity, customer reactions to them, market saturation. The behavior of consumers is influenced by the marketing activity of the manufacturer, which also entails a change in the cost of the goods. The demand, and accordingly the price, is influenced by the tastes and preferences of buyers, their incomes, even the number of potential consumers matters.
Costs. When setting the price for a product, the manufacturer determines its minimum size, which is due to the costs that were incurred in the production of the product. Costs are constant and variable. The first include taxes, wages, production services. The second group consists of the purchase of raw materials and technologies, cost management, marketing.
Government activities. In different markets, the government can influence prices in many ways. Some of them are characterized by fixed, strictly regulated prices, while others - the state only controls compliance with the principles of social justice.
Product distribution channels. When analyzing pricing factors, it should be noted that the activities of participants in the distribution channels are of particular importance. At each stage of product promotion from manufacturer to customer, the price may change. The manufacturer usually strives to maintain control over prices, for this he has various tools. However, retail and wholesale prices are always different, this allows the product to move in space and find its end customer.
Competitors. Any company seeks not only to fully cover its costs, but also to extract the maximum profit, but at the same time it has to focus on competitors. Since too high prices will scare away buyers.

Internal factors

Those factors that a manufacturing company can influence are usually called internal. This group includes everything related to cost management. The manufacturer has various opportunities to reduce costs by finding new partners, optimizing the production process and management.

Also, internal pricing factors of demand are associated with marketing activities. A manufacturer can help increase demand by conducting advertising campaigns, creating excitement, fashion. Intrinsic factors also include product line management. A manufacturer can produce similar products or products based on the same raw material, which helps to increase profitability and lower prices for some products.

External factors

Phenomena that do not depend on the activities of the manufacturer of the goods are usually called external. They include everything related to the national and global economy. Thus, the external pricing factors of real estate are the state of the national economy. Only when it is stable is there a steady demand for housing, which allows prices to rise.

Also, external factors include politics. If a country is in a state of war or a protracted conflict with other states, then this will necessarily affect all markets, the purchasing power of the consumer and, ultimately, prices. The actions of the state in the sphere of price control are also external.

Pricing strategies

Considering various pricing factors, each company chooses its own path to the market, and this is implemented in the choice of strategy. Traditionally, two groups of strategies are distinguished: for new and for existing products. In each case, the manufacturer relies on the positioning of his product and on the market segment.

Also, economists distinguish two types of strategies for an existing product on the market: a moving, falling price and a preferential price. Each pricing method is associated with a market and marketing strategy.

Factors affecting pricing

Price is one of the means of the marketing mix used by a company to achieve marketing goals. Formation of a consistent and effective marketing program requires agreement on the pricing policy of product design, distribution channels and promotion methods. Changes in the parameters of any element of the marketing mix, as a rule, require a revision of the company's pricing policy. Thus, manufacturers who expect active support from their resellers in promoting a product should provide for wider boundaries of trade margins. High-quality positioning requires higher prices to cover the high costs.

Professor of the Financial Academy under the Government of the Russian Federation E.I. Punin notes: "For independent producers working in the market, regardless of the form of ownership, the issue of prices is a matter of life and death."

Making marketing decisions in the field of setting prices for goods is a rather difficult task for an enterprise, which is due to the special role of price as a means of making a profit, as well as its specific functions in the marketing mix.

Pricing policy is closely related to the product, distribution and communication policy of the enterprise and is the final stage in the development of a marketing mix.

“Only marketing can set a price for a product that will be high enough for the manufacturer and low enough for the consumer,” says the second commandment of marketing.

Price - the amount of money requested for a product or service, or the sum of those values \u200b\u200bthat the consumer gives in exchange for the right to possess or use the product or service.

Price is the only element of the marketing mix that generates revenue. Besides, the price is one of the most flexible and easily changeable elements of it. However, pricing and price competition are the # 1 marketing problem.

At the corporate level, price is the main factor in long-term profitability, predetermining the methods of conducting price or non-price competition:

- price competition leads to the establishment of prices below the prevailing market level and is associated with the achievement of advantages in minimizing costs;

- non-price competition allows the establishment of prices at the level of prevailing market prices and even above them and is focused on the policy of differentiation.

The essence of pricing in marketing- the establishment of such prices for the goods of the enterprise and such a variation by them depending on the position in the market in order to seize a certain share of the market, get the intended amount of profit, etc.

The objectives of the pricing policy of the enterprise may be:

long-term or short-term profit maximization;

the economic growth;

market stabilization;

reduced consumer sensitivity to prices;

maintaining leadership in prices;

prevention of the threat of potential competition;

maintaining trade loyalty;

improving the image of the enterprise and its products;

increasing buyer's interest;

strengthening the market position of the assortment;

capture of dominant positions in the market.

For successful work in the market, it is very important to correctly take into account the factors affecting the price level.

Marketers of foreign firms usually rank them.

1. Production costs.

2. Prices of competitors-exporters to a given country.

3. Prices of local competing firms.

5. Transport costs.

6. Surcharges and discounts in favor of the intermediary.

7. Import duties and other charges.

Determining the price of a product is an art based on the knowledge and consideration of numerous internal and external factors (Table 1.1).

Factors Affecting Marketing Pricing

The value of production costs determines the minimum price that a company can charge for its product and refers to internal factors, affecting pricing. The company seeks to set a price that would not only cover the costs of production, distribution and marketing of goods, but would also provide the proper rate of return for the effort and risk. Company costs can be an important element in a pricing strategy. Companies that achieve low costs can charge lower prices, which leads to significant increases in sales and profits, i.e., delays set a lower price level ... Market and demand are external factors affecting pricing have an upper limit.

The degree of freedom in price formation varies depending on the type of market. Economists have identified 4 types of markets, each of which has its own pricing requirements.

Pure competition takes place in the market of homogeneous goods with a large number of buyers and sellers, none of which has a large influence on the formation of the market price. Sellers in such a market don't spend a lot of time developing a marketing strategy.

Monopolistic competition takes place in a market with a large number of buyers and sellers and different prices for one type of product. Sellers strive to personalize offers for different buying segments and, in addition to price, use trademarks, advertising and personal sales.

Oligopolistic competition takes place in a market with a small number of sellers, each of whom is highly sensitive to the other's pricing and marketing strategies. Products can be homogeneous (steel, aluminum) or heterogeneous (cars or computers). There are few sellers in the market because new sellers are not easy to enter the market. Each seller constantly monitors the changes in the strategy and actions of the competitor

Pure monopoly takes place in the market of one seller. The types of monopolies are state monopoly, private regulated monopoly and private unregulated monopoly.

Nowadays, the price is one of the most important elements of any product, as a result of which, building the marketing strategy of a particular company, a specialist must take into account all existing pricing factors.

However, many people who are not professionally involved in this area, but at the same time cannot hire a qualified specialist, must correctly understand what these factors are. In other words, you need to know how much the price affects the work of the company, what pricing factors exist, as well as how the cost of a particular product is correctly formed.

Price - what is it?

There are at least four points of view on the above question, depending on which specialist voices them:

Economist - the interaction of two market forces, such as supply and demand.
Accountant - the price should cover the financial costs that were allocated for the manufacture of a particular product, as well as provide a profit for the company.
Consumer - an indicator of the value of a product.
Seller - the opportunity to gain a competitive advantage over similar establishments.

Pricing factors apply not only to various commercial organizations, but in addition, they are also used by non-profit companies, such as trade and industrial associations, charitable foundations and a number of other structures. For example, in the pricing process, charitable foundations can set a wide variety of target donation levels, as a result of which patrons will be offered various statuses or conditions, depending on how much they were willing to donate to this fund.

Factors

Determining the price is a rather laborious procedure, because in order to establish a truly correct and at the same time competitive cost of a particular product, you need to take into account a variety of pricing factors, such as:

Product cost price. The sum of fixed or variable costs that the company will incur in the process of producing each unit of production. The cost of manufacturing a product or providing a particular service are the most important pricing factors, because if the selling price is lower than the cost of a particular product, the company will end up incurring losses.
Marketing... The price should be as close as possible to the target market, consumer, and distribution channels through which the goods will be sold.
Positioning... The cost will allow you to form the correct image of a certain product or service, ranking it as an economy segment, mass market or luxury.
Product life cycle. Different stages of the life cycle should take a different approach to the value strategy because there are different goals.
Competition... The cost of the goods should be selected in accordance with the price competitive environment, as well as price clusters that have formed in the current market.
Forecasting the actions of competitors. It is necessary to correctly predict the consequences of certain decisions in the field of pricing. For example, if you set the price too low, then a price war may start, which is unlikely to be interesting for either side.
Price perception by consumers. A competitive price is built on the basis of consumer perception, since a too cheap product may seem to buyers simply of poor quality, while an inflated price has the ability to scare off a potential consumer.
The state of the economy. While the economic crisis is active, the goods that are in the economy segment become more in demand, and at the same time, the sensitivity of buyers to the cost of products increases.
Legal regulations. From a legal point of view, in the country where the products are sold, there may be certain laws that limit price discrimination or may establish the maximum possible cost threshold for a certain category of products.

How is the price formed?

The correct pricing mechanism looks like this:

The objectives of this procedure are determined.
The cost of production is calculated, and the costs of a possible increase in the scale of production are forecast.
The point at which the company operates without losses is determined.
The demand for this or that product from the target audience is estimated.
The elasticity of demand is estimated, and the relationship between profits, costs and demand for a product is determined.
It evaluates how the value of the product is perceived in the target market.
The prices for similar products, which are set by competitors, are analyzed.
Determined price positioning in relation to competitors.
A clear pricing strategy is approved as well as tactical measures.
The final price is set.

Determining the goal

The goals that the pricing mechanism will pursue fall into two categories:

Marketing.
Financial.

Financial goals provide targets for sales and profits, while marketing targets consider the basic needs of the company regarding how the product is positioned in the industry and how the image of the product is perceived.

The financial goals pursued by the pricing process are formed in terms of maximizing profits, income, as well as expanding sales volumes. In addition, financial goals provide for the achievement of a certain level of sales and profit, as well as one or another level of profitability of the product being sold.

If we are talking about the marketing goals that the pricing process pursues, then we can say that they represent a continuation of the strategy of positioning and subsequent promotion of the product, and are also defined in terms of maintaining or even increasing market share. They also consider interaction with competitors, help build a certain price positioning or reach the level of trial purchases and attract a certain percentage of the target audience to the product that is offered by this company.

What are the pricing decisions?

There are three important decisions a marketer will have to make when considering the pricing options available:

Determine the technology for setting prices.
Choose a pricing strategy.
Establish a pricing policy in terms of tactical pricing measures.

The pricing strategy defines the principles of long-term product value management, while it is worth noting the fact that this strategy should not contradict the product's marketing strategy, as well as determine the price positioning in relation to competitors. In addition, it defines pricing strategies in sales channels, as well as the need for price discrimination. The types of pricing determine the technology for calculating the cost of production, taking into account the existing costs, as well as the scale of production. The determination of tactical price measures already concerns the issues of pricing policy in relation to all kinds of shares associated with a temporary decrease in value through individual sales channels, the introduction of discounts or the terms of package pricing.

Features of price formation in the world market

Price and pricing in the world market differ in a number of features and provide for the most detailed study of all factors that in one way or another affect the formation of the cost of products, both of a general nature and exclusively applied. In particular, the chosen cost will determine how much producers will be able to reimburse after the sale of products, and what not, what level of profit and income can be provided, and where resources will be subsequently directed. Among other things, price and pricing help determine whether there will be incentives for the subsequent expansion of the company's foreign economic activity.

In a constantly changing market economy, pricing in foreign trade, just like in the domestic market, is carried out under the influence of a certain market situation. In principle, the concept of price is similar both for the characteristics of the external market and for the characteristics of the internal one. Pricing strategies include a variety of factors and must be selected in accordance with specific market conditions as well as careful forecasts for the future.

The price, including in international trade, is a certain amount of funds that the seller is going to receive by offering a certain service or commercial product. The coincidence of these requirements depends on a number of conditions, which are the factors of the pricing strategy, and they can be distributed among themselves according to the level and scope or nature.

How to determine the cost?

As mentioned above, the value is determined in accordance with the conditions of competition, as well as the ratio and state of supply and demand in the current market. However, in reality, when the international environment is considered, the pricing in the market environment becomes somewhat different. Thus, five additional groups of pricing factors need to be considered.

Supply and demand

As you know, the ratio of supply and demand in the world market is felt by the subjects of foreign trade much more acutely compared to how this ratio is felt by suppliers in the domestic market. Indeed, in this case, you need to see the world market in front of you, after which you continuously compare your own production costs not only with the value determined by the pricing in the domestic market, but also compare it with world prices.

The manufacturer, that is, the seller of goods in the foreign market, is constantly in the regime of the so-called "price stress", but at the same time, there are more consumers on the international market.

Mobility

Factors affecting pricing should also take into account the fact that in a world market, factors of production are less mobile. Hardly anyone can argue with the fact that the freedom of movement of capital, services, goods and labor in this case is much less in comparison with the framework of a particular state. Indeed, first of all, the factors affecting pricing take into account the fact that this movement is constrained by national borders, as well as by relationships in the currency sphere, which prevents the normal leveling of profits and costs for all these elements. Accordingly, all this must be taken into account when forming a price on the world market for your products.

What are world prices?

World prices are the cost of conducting large export-import transactions that are concluded on the commodity markets of various countries. The concept of "world commodity market" provides for a complex of stable, repetitive transactions for the sale and purchase of certain services or commodity products, which have international organizational forms or which are expressed in systematic export-import transactions on the part of large consumers and suppliers. In the current world trade, the specifics of pricing include, first of all, supply and demand, since the market price depends on them the most.

Consumers

If we talk about the practical impact on the cost of the offered product, then the effective demand of consumers is taken into account, that is, in other words, does the price audience have money to purchase a certain product. In this case, such external factors of pricing are taken into account, such as the quantity of goods that a consumer can buy, as well as the usefulness of this product for him and its consumer qualities.

Seller

The supply side also has its own pricing factors. First of all, pricing issues should consider how much of the product is offered by the company on the market, as well as what are the costs of production or circulation in the process of selling the product on the market. Among other things, the prices for the resources or the means of production of the corresponding good are considered.

The general factor is the substitutability of the offered product by some other, which will also fully satisfy the needs of buyers. Among other things, the level of world prices is greatly influenced by the currency of payment, the terms of payment, as well as a number of additional conditions, including economic and non-economic ones.

Distortion

Often, specialists who regulate pricing encounter situations such as a distortion of the ratio of supply and demand. When an extremely high demand arises for a product, at which products manufactured at a national price in the worst conditions begin to be thrown into the market, it determines the world price for a certain time, and the price is quite high. In addition, it also happens that supply significantly exceeds demand, as a result of which the bulk of sales falls on those subjects of trade in which there are better production conditions, but at the same time a lower price is set.

It is worth noting that the pricing policy includes a lot of interesting features. For example, if some of the largest manufacturers in their country is the largest supplier of products, then this does not mean that they can achieve the same success in the world market. In the overwhelming majority of cases on the current world market, most of the goods are sold by countries that from an economic point of view can hardly be called powerful and large states.

When interacting with market prices, including foreign trade prices, it is necessary to correctly consider the difference in them and at the same time take into account the positions of individual parties, as well as the current market situation. First of all, there is such a concept as the seller's price, at which the value is formed by the seller and is somewhat overstated, as well as the buyer's price, which he is willing to pay and which, accordingly, is lower.

In addition, you need to understand that depending on the market conditions, the seller's market, in which, due to the large amount of demand, prices are entirely dictated by the seller, as well as the buyer's market, where there is too much supply and the price situation is the opposite. However, such a market situation is constantly changing and is reflected in the price, as a result of which it is she who becomes the main object of study and constant observation, since otherwise, when engaged in pricing, very, very serious mistakes can be made.

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Federal Agency for Education

GOU "St. Petersburg State Polytechnic University"

Cheboksary Institute of Economics and Management (branch)

Department of Accounting, Analysis and Auditing

Test

on pricing

Option 20

Completed by a student

Correspondence department

2 courses 080105sh / k specialty

Finance and credit

Pavlova Nadezhda Anatolyevna

Checked by the teacher

Evgrafov O.V.

Cheboksary 2010

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

2. Concept and types of demand elasticity

3. State regulation of prices

List of references

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

demand supply pricing

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

First, they are formed on a single methodological basis. 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. The presence of a methodological basis is a necessary condition for creating a price system; this is a pricing strategy for the entire economic complex, which involves the development of a pricing concept, a mechanism for its implementation and the creation of a control system for this process.

One of the important methodological elements are the principles of pricing, which are permanent basic provisions that determine the nature of the formation of the price system. In the economic literature, the following basic principles are distinguished: scientific character, purposefulness, continuity, unity of pricing and control.

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

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

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

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

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

An offer of a product or service is a manufacturer's willingness to sell a certain amount of a product or service at a certain price for a certain period of time.

The volume of supply is the amount of a product or service that sellers are willing to sell at a certain price within a certain period of time.

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

The law of supply: other things being equal, the volume of supply of a product increases if the price of a product increases 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 chart 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.

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

Distinguish:

- individual demand - this is the demand of a specific 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 specific price over a period of time.

A change in the amount of demand is movement along the demand curve. Occurs when the price of a product or service changes, all other things being equal.

The law of demand: other things being equal, as a rule, the lower the price of a product, the more the consumer is ready to buy it, and vice versa, the higher the price of the product, the less the consumer is ready to buy it.

Factors influencing demand:

· Consumer income;

· Tastes and preferences of consumers;

· Prices for interchangeable and complementary goods;

· Stocks of goods with consumers (consumer expectations);

· product information;

· Time spent on consumption.

With a change in other factors and a constant price of the goods, the demand itself will change. 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 changes in demand, consumers are willing to buy more (or less) goods than before at the same price, or are willing to pay a higher price for the same quantity of goods.

2. Demand elasticity concept

Supply and demand depend on many factors. Their change entails a corresponding change in supply and demand. The concept of elasticity is connected with this.

Elasticity is a measure of the response of one economic variable to a change in another. In economic theory, the elasticity of supply and demand is considered. The elasticity of demand for a product is the percentage between 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 quantities, 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 amount of demand for a product was 10,000 units and then decreased by 2,500, then there was a change in demand by 25%. However, an increase in demand for this product from 7,500 units to 10,000 will give 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\u003e 1 - elastic demand (for luxury goods);

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

E \u003d 1 - demand with unit elasticity (depends on individual choice);

E \u003d 0 - completely inelastic demand (salt, medicines);

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

You cannot talk about elastic or inelastic demand curves, since 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, where each point represents the same elasticity.

Income elasticity of demand

This is a numerical parameter that shows what is the reaction of the consumer to changes in his income when prices remain unchanged.

The meaning of income elasticity is closely related to the concept of normal and inferior goods. 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 lower quality goods, an increase in income causes a decrease in demand. Income and demand change in opposite directions, so in this case the income elasticity of demand is negative. For certain groups of goods (salt, matches), demand does not increase with increasing income, the elasticity is zero.

3. Gostate regulation of prices

The influence of the state on the pricing processes has become one of the most 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 the rise in inflation. Pricing policy is becoming one of the most important areas of economic activity of the state. An integral part of this policy should be considered the attempts of the state to influence the state of the economic situation in individual commodity markets through price regulation. Price regulation is becoming a common practice in the state.

In these conditions, government regulation in the field of prices usually pursues the following goals:

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

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

3. To complicate the growth of wages, which increase in proportion to the rise in prices.

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

5. To mobilize budgetary funds necessary for carrying out social and economic activities.

Some economists argue that price regulation by the state is unacceptable in market conditions. However, the experience of countries with market economies convincingly shows that the state did not remove itself and does not withdraw from the 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 with the help of legislative, administrative and budgetary-financial measures to influence prices in such a way as to contribute to the stable development of the economic system as a whole, i.e. to level out cyclical fluctuations of reproduction processes through prices. Depending on the specific economic situation, price regulation is anti-crisis and (or) anti-inflationary.

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 budgetary expenditures, taxes, interest rates for loans and other economic levers is manifested in changes in costs and prices for products and affects the 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 market development: the formation of entrepreneurship, the adoption of antimonopoly legislation, etc. Carrying out by the state, in particular, of antimonopoly policy should ensure the removal of artificial restrictions and the deployment of competition in all sectors and sectors of the economy, its support and any encouragement and development of market pricing on this basis.

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

The goals of government regulation are to prevent inflationary price increases as a result of persistent shortages, a sharp rise in prices for raw materials and fuel, monopoly of producers, in order to create normal competition that promotes the implementation of scientific and technological progress in production. At the same time, an important task is to achieve certain social results, in particular, maintaining a decent living wage, providing people with the opportunity to purchase essential goods in sufficient quantities.

The measures of influence on producers by the state can be as follows straight - by establishing certain pricing rules, and indirect - through such economic mechanisms as a financial and credit mechanism, wages, taxation, etc.

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

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

The 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 exerts a decisive influence on the entire price system.

Direct government regulation implies the need to adjust the market and supplement the market mechanism with a centralized government policy through control over 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 the achievement of stability in the economy. Therefore, the state, by setting and regulating 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 government regulation of prices, market mechanisms weaken and there is a risk of losing market benchmarks for comparing costs and benefits, since the main market parameters are strongly influenced by non-market factors. The price, which is not connected with a competitive market and set by the state, cannot change quickly enough depending on changes in supply and demand. In this case, as in the planned economy, either a deficit 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 the financial position of many enterprises become rather unstable.

In a market economy, both excessive enthusiasm for setting and regulating prices on the part of the state and a complete rejection of such regulation, primarily in relation to the products of efficient, but hindering competition, monopoly enterprises are unacceptable. In a transitional period 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 sales 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 a relationship between the prices of agricultural products and the goods purchased by farmers. This function is carried out by the Ministry of Agriculture.

Along with the methods of direct price regulation, the state carries out indirect regulation, i.e. affects the pricing process and a number of indirect measures. Such measures have been applied 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 market conditions, at creating a certain situation in the field of financing, foreign exchange and tax transactions, and in general at establishing an optimal balance between demand and supply.

Methods of indirect price regulation include public procurement, the tax system, regulation of money circulation and credit, public investment policy and regulation of public expenditures, setting depreciation rates, etc. By these measures, the state seeks to establish a balance between demand and supply and thus contribute to a more even and slow growth of prices across the entire economy. Indirect methods of price regulation are manifested in the impact not on prices themselves, but on factors affecting 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 accelerating inflation, growing shortages of certain products, the need for rapid economic restructuring and weakening as the country emerges from the crisis.

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

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

The tax system has a significant impact on the level and dynamics of prices. The dynamics of prices and the rate of inflation directly depend on the amount of taxes. The higher the taxes, the faster prices rise, the wider the inflationary sweep. Any manufacturer tries to transfer tax through the price of goods to the consumer. At the same time, the state, receiving large revenues, increases its expenses. Hence, in order to reduce inflation, slow down the rise in prices, the state must reduce tax rates. The modern tax policy in the developed countries of the world is directed towards tax cuts. In the USA, for example, the share of income taxes in federal budget revenues does not exceed 8%, while in Russia it until recently was about 20%. The latest measures of the Government of the Russian Federation are aimed at reducing the tax burden, primarily for producers 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 the pricing processes in this case are supplemented by direct direct methods of state regulation. The state, by establishing certain regimes of price movement, by “freezing” or “blocking” them at a certain level, through 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 methods of setting prices depends on the correct choice of the conditions for their application. 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 regulation of prices largely depends on its interaction with other measures of influence on the economy. So, blocking prices, the introduction of fixed prices, changes in tax rates on profits, as a rule, should be combined with the regulation of wages.

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

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

At the same time, control is carried out by federal or local authorities, which are entrusted with the functions of regulating prices and monitoring their application.

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

If the monopoly enterprises violate the antimonopoly legislation, which is expressed in the unjustified 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 Activity in Product Markets." These measures include the transfer of profits obtained from overstating prices and tariffs to the budget income, as well as fines in the same amounts.

In the Russian Federation, a certain procedure for the application of economic sanctions for violation of state price discipline has been developed and is in effect, aimed at strict observance by all Russian enterprises of the current legislation and other normative documents on pricing. Thus, enterprises that violate state price discipline during the sale of products, goods and services and have received excessive amounts as a result are subject to economic sanctions, consisting in the indisputable withdrawal of these amounts from the profits of enterprises to the budget. An additional fine is collected from the enterprise in the same amount.

Violations of state price discipline include, in particular:

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

Overestimation of established markups (markups) to prices and tariffs, accrual of unforeseen markups, as well as failure to provide established discounts;

Application of free wholesale (selling) prices, tariffs, markups and markups not agreed with consumers in the prescribed manner;

Overestimation of prices for products for which, due to design or technological deficiencies, consumer properties are not achieved, taken when agreeing on their level, etc.

Control over the observance of 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 by the bodies of pricing and price control of the republics within Russia, territories, regions, autonomous formations, cities of Moscow and St. Petersburg. At trade and public catering enterprises, price control is also carried out by the bodies of the State Inspection for Trade, Quality of Goods and Protection of Consumer Rights in accordance with the established procedure.

An enterprise that independently revealed a violation of state price discipline and received, as a result, excessive amounts, regardless of its financial condition, contributes them to the budget at the expense of profits that usually remain at the disposal of the enterprise after taxes and other mandatory payments. At the same time, it is mandatory for a given enterprise to simultaneously reduce the price of its products, goods and services.

The amounts received as a result of violation of state price discipline and subject to withdrawal to 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 whose products the maximum levels of profitability are set, the amounts received due to the excess of the maximum level of profitability in general for groups or types of products, goods and services are subject to withdrawal.

Price control with the use of economic sanctions for violation of state discipline of prices applies to all economic entities located in Russia, including enterprises with foreign investment, carrying out production, trade and other commercial activities.

It should be noted that there is an urgent need for direct state control, above all, over monopoly markets. Where a natural state monopoly is recognized, for example, in the defense industry, fundamental science, etc., real, full-scale administration is appropriate. This is 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 government procurement. Administrative regulation of the markets of those goods of inelastic demand that belong to the state monopoly is quite admissible. It can be done through the imposition of strict excise rates, price planning, or in some other way.

World practice knows many combinations of different 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 government regulation of the market economy.

List of references

1. Digest of Economic Theory // Sokolinsky VM, Vasilyeva EN. -M., Analytica-Press, 1998

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

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

4. Pricing: a tutorial // Shevchuk DA // 2008.

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Factors affecting the pricing processes. Internal and external factors of pricing. Classification of pricing decisions

Price concept

Price functions

Pricing process

Principles of pricing

Types of factors affecting the price

Basic system of pricing factors

Internal factors

External factors

Pricing strategies

Price - what is it?

Factors

How is the price formed?

Determining the goal

What are the pricing decisions?

Features of price formation in the world market

How to determine the cost?

Supply and demand

Mobility

What are world prices?

Consumers

Seller

Distortion

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

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