Market based pricing method based on consumer comparison. II. Market-based pricing methods. Differences between market pricing methods and cost

Each company, once again defining market value new product, strive to maximize your income. We will describe in detail how to do this correctly in our article. After reading this material, you will become familiar with six basic pricing methods. Each pricing approach has its own characteristics, advantages and disadvantages; each described method of calculating the best price is used in practice; but which model is right for you depends on the principles of process management in your company.

6 ways of pricing

In marketing, there are 6 main pricing methods, of which two methods of calculating prices are based on the cost of the product, and four other pricing models are based on factors of the market environment.

Fig. 1 Classification of pricing methods in marketing

Market-based pricing methods include: the perceived value method, the price barriers method and the current price method. Costly methods of pricing include: the method from the marginality of the product, based on a premium to production costs and based on full cost accounting.

Using cost-based pricing methods, the company takes the current cost of the product as its starting point and sets the selling price based on its value. Such methods are suitable for companies that are not able to affect the cost of goods: for example, for trading companies or for a company with an established product cycle in which costs cannot be reduced.

Market methods, on the contrary, are based on the influence of market factors on the value of the product: consumer perception, formed patterns of behavior, the demand curve and the competitive environment of the market. The starting point for calculating the value of a product by market methods is the ideal product price that will maximize sales and profits. And already, knowing the target cost of the product, the company strives to cut costs and obtain the desired level of cost.

Let's consider in detail each pricing method using illustrative examples with ready-made calculation formulas and methodological recommendations.

Perceived value method

The pricing method based on is built on marketing research consumer perception of the price of the product. The method is based on the assumption that the consumer will consider the cost of the goods acceptable if the price coincides with his idea of it. In other words:

If the price of a product is too low (in the opinion of the consumer), the consumer will refuse to buy, as he will doubt the quality of the product
If the price of the product is too high (in the opinion of the consumer), the consumer will refuse to buy, since he will not agree to pay
If the price of the product corresponds to the consumer's idea of value, the probability of purchase will be maximized.

At first glance, everything looks quite simple: to calculate the price, you just need to measure the finished product to the target consumer and ask him about the estimated cost of the demonstrated product. But in practice, in order to achieve the purity of such an experiment and obtain undistorted data, a number of conditions must be met.

Method implementation

To set prices according to the perceived value method, it is necessary to conduct a quantitative study of the finished product (with final characteristics, packaging, dimensions, etc.) and create a situation of making a real purchase as accurately as possible. The research process looks like this:

The consumer is shown the finished product of the company surrounded by competitors without a price.
Competitive products, on the other hand, have a price tag with a real price.
The consumer is asked the question: how much, in his opinion, should the company's product cost?
The named price will be the perceived value of the product.

It is very important for the consumer to see the prices of competitive products, as they allow him to form a benchmark for the price of a new product of the company taking part in the research.

Calculation formula

The formula for calculating the cost of a product using the perceived value pricing method is as follows: Product price = PV * k, where

Perceived Value (PV) = Perceived Product Value
k - coefficient of adjustment of perceived value (from 0.9 to 1)

Why do you need a coefficient? When calculating the cost of a product using the perceived value method, it is recommended to maintain a positive difference between the perceived value of the product and the real price, in other words, set the price of the product so that it is slightly lower (by about 5-10%) from the perceived value. In this case, the purchase of the goods will seem to the buyer to be a winning one.

Pricing based on price barriers

The method is based on the assumption that the consumer forms an idea of "an acceptable price of goods" based on price clusters. Each price cluster is a corridor of prices of goods "from and to", and in the opinion of the consumer has certain characteristics. The idea of price clusters (or price barriers) is formed in the mind target audience as a result of the accumulation of experience about shopping in the market.

The formation of price clusters is caused by the consumer's need to divide the myriad of goods into "cheap", "ordinary", "expensive" and "premium", which saves time to choose the desired product... There are no universal price clusters, they are individual for each market and can be determined in the course of quantitative consumer research.

Example of price clusters:

up to 30 rubles: goods of the economy segment with basic characteristics, low quality
from 30-50 rubles: mass-market goods, unknown brands, good quality, with basic characteristics + some improvements
from 50-100 rubles: high quality goods, well-known brands, imported, with maximum characteristics
over 100 rubles: premium goods, fashion, status, famous brands.

Method implementation

To calculate prices using the described pricing method, the first step is to conduct a quantitative consumer research on the subject of formed price clusters in the minds of the audience. As part of the study, identify the image characteristics of each cluster and assess in which price segment the developed product with its final characteristics and design falls. Then, assess the likelihood of purchasing the developed product in each price cluster and, guided by the results of research, as well as knowledge of competitors' prices and target profitability levels, set a price for the new product.

Usually this type of pricing is used in conjunction with other methods of setting prices and serves as a corrector.

Pricing in relation to competitors

A pricing method in which a company sets a price based on the cost of competitive products. In other words, the company sets the principles of price positioning relative to its competitors and follows them when calculating the price of the product. The cost of the product in this case is secondary and depends on the target price of the product. The principles of price positioning can be as follows:

The price of the product is x% higher than that of competitor A; x% lower than competitor B;
The price of the product is always x rubles lower than that of competitor C;

Pricing based on the current price level

This market-based pricing method is used to establish prices in markets for similar goods. In such markets, differences in the product are minimal or the consumer buys the product only for its basic characteristics and is not ready to overpay for additional functions or conditions. Accordingly, the consumer chooses the product with the lowest cost. (For example, aluminum or steel markets, matches, toothpicks, etc.)

Pricing using the current price level method means that the prevailing market price is assigned to the product. If the spread between prices in the market is not large, the arithmetic mean is taken.

Profit margin pricing

Moving on to costly pricing methods. The first method is inextricably linked with the concept of o. It consists in setting a price level that will cover the cost of producing goods. Thus, the starting point for determining the price is the target profit from the sale of the product.

Example wording target by profit for calculating the price of goods: the total profit from the sale of a new product must be n% higher or equal to the company's expenses.

Method implementation

To calculate the price in the described way, it is necessary to determine 3 indicators: variable costs for the production of 1 unit of goods; the target sales volume of the product, which the company plans to reach; and fixed costs the company in the production of a set volume of sales.

When all the initial data is determined, you can calculate the minimum selling price of the product (equal to the break-even point of sales). The minimum price obtained in the course of calculations is the lower threshold of the product cost, below which all sales of the product will bring losses. After obtaining such a price, an analysis of the competitiveness of such a cost should be carried out: There are several possible ways:

compare the minimum price with the perceived price of the product
compare the minimum price with competitors' products
estimate the market volume of demand at the lowest price

As a result of the analysis, it will become clear whether the company can sell the product at this minimum price. There are 3 possible scenarios for the development of events:

The minimum price is the limit of competitiveness, any price above the minimum leads to a refusal to purchase. In this case selling price = minimum price.
The product will be in demand at a price that exceeds the minimum cost. In this case, the selling price will be higher than the minimum price.
The product will be in demand only at a price below the minimum price. In this case, the company must look for ways to reduce the cost of goods.

Method implementation example

Let's say we have the following initial product information:

Variable cost of 1 unit of production = 25 rubles
Business monthly costs = 100,000 rubles
Target sales volume with competitive prices = 10,000 pcs

Based on the available information, we can determine the minimum price level for the product that will cover all the company's expenses:

We calculate the total cost of the company in the production of goods: fixed costs + variable costs = 100,000 + 25 * 10,000 = 350,000 rubles
The minimum profit per unit of production to cover the costs of the business should be equal to: monthly costs / target sales in units = 350,000 / 10,000 = 35 rubles. Thus, the price of 35 rubles will allow the business to break even.

The next step is to assess the competitiveness of the received minimum cost goods. As a result of a study to assess the perceived value of a product, we found that a consumer is ready to buy a product for 55 rubles. Based on the information received, we can safely set the cost of the product at 49 rubles (10% lower than the perceived cost).

Production cost premium pricing

The method consists in establishing a fixed percentage of profit that you plan to earn from the sale of 1 unit of goods. In other words, according to this method, the selling price of a good or service must provide a fixed level of profitability, at the existing level of variable costs.

The rate of return on goods is determined based on the following parameters:

Factors Affecting Product Profitability

Pricing methods are methods of pricing goods and services within the framework of the adopted pricing strategy.

Despite the variety of methods and approaches to pricing, there is a price calculation algorithm (Fig. 13).

Rice. 13.

As can be seen from the above diagram, the price calculation algorithm consists of a number of successive stages.

Setting pricing goals. When determining the price of its product, the company must clearly define the goals that it pursues. Goals can be short-term (tactical) and long-term (strategic). The level and structure of prices depend on the choice of goals, which in turn affect the amount of profit received by the enterprise, the structure of production, and costs.

Determining the demand for products. The demand for products is one of the main pricing factors external to the enterprise. Demand reflects the need of buyers for a product, desire and ability to purchase it. Supported by the budgetary constraint of consumers, demand determines the maximum possible price at which an enterprise is able to sell its goods. Demand is a moving element of the market; it is influenced by factors such as the price of a product, its quality, purchasing power, tastes and preferences of consumers.

When assessing demand, an enterprise should pay attention to:

on the price elasticity of demand, which shows how many percent the demand will increase (decrease) with a decrease (increase) in the price of a given product by 1%. From this point of view, goods are absolutely inelastic, single, elastic and inelastic;
on cross elasticity, which shows how much the demand will change when the price of another product changes. From this point of view, goods are interchangeable, complementary and neutral in relation to each other.

Another important point is the assessment of the economic and psychological capabilities of buyers to pay a set price for a product. Some businesses offer the buyers of a new product to set a price themselves and sell the product on the market at that price, which increases the popularity of the business with consumers and serves as an advertisement.

Estimation of production costs. This estimate depends on which pricing method the company chooses. But in any case, the amount of costs determines the minimum price level for goods and services. The enterprise calculates the following production costs:

fixed costs, the value of which does not change when the volume of production changes (costs of renting premises, depreciation of fixed capital, remuneration of management personnel, social insurance contributions);
variable costs, the value of which depends on the volume of production (costs of raw materials, materials, fuel, labor remuneration of production personnel, etc.);
gross (total) costs - costs for a batch of products;
average gross costs per unit of output, which are the sum of average variable and fixed costs of production;
marginal costs - the increase in costs with an increase in production per unit.

Often, enterprises strive to choose a price level that will give the maximum amount of profit, covering all production and sales costs.

Analysis of prices and quality of competitors' products. The price and quality of a product are the main economic parameters of its competitiveness. Comparison of its product with similar products produced by competitors helps the company choose a pricing policy and strategy, anticipate the possible reaction of consumers to price changes, and determine its role in terms of the possibility of influencing the pricing process in a given market.

In any case, the company should know that the most competitive is the product, the consumption price of which (all costs incurred by the consumer after purchasing the product) is lower, and not the product with a lower selling price. This is due to the fact that for many goods (cars, including trucks, airplanes, computers, etc.), the selling price can be 10-20% of the consumption price.

At this stage, it is planned to purchase competitors' goods, analyze price lists, and poll the opinion of buyers.

Choosing a pricing method and calculating the original price of the item. Due to the fact that there are a large number of pricing methods, an enterprise must choose a method that most fully reflects the specifics of a given product and market.

In the process of establishing the initial price for a product, an enterprise can also determine the upper and lower limit (threshold) of the price, as well as possible limits and conditions for price reduction.

For example, the possibilities of price reduction at the stage of market saturation with a product or a product leaving the market in the event of appropriate actions of competitors, changes in the level of demand, economic conditions, etc. can be determined.

However, the main method of reducing prices is to reduce production costs. It is especially important to proactively reduce prices in the event of underutilization of production capacities, the threat of a reduction in market share with an aggressive pricing policy of competitors, a desire to achieve a dominant position in the market, overstocking of warehouses, etc.

Setting the final price. At this stage, all pricing parameters are clarified. In addition to costs, the company must take into account the influence of competitors' policies, the possible reaction of consumers, the state, intermediaries, participants in the distribution channels for the goods, and also insure the price against possible risks... It is required to bring the price in line with the uniform conditions and terms of delivery, forms and currency of payment for the goods.

To establish the final price of a product, an enterprise can use different approaches:

Determination of the ratio of prices of goods and modification of these goods (setting prices within the range of goods). When forming the price step for each level of the manufactured product range, differences in the cost price, the assessment of these goods by consumers, as well as the prices of competitors and other factors are taken into account. With a large gap in prices of two identical goods, the consumer purchases a more perfect product, and with an insignificant price difference, a less perfect one.
Determination of price lines associated with the sale of goods in a price range, where each price reflects a fixed level of quality for different models of a product of the same type. Usually the price range is defined as low, high and medium. The main task of the seller is to identify the qualitative differences felt by the consumer between products and their models, which could serve as a basis for the difference in prices.
Setting a limited number of specific prices, which should be clear and not too close to each other, so that consumers can see the qualitative differences between the models. Prices in the upper range should be fairly split as consumer demand becomes less elastic here. In order to maintain clear distinctions between product groups, it is necessary to maintain price ratios with rising production costs. Price lines create benefits not only for consumers, but also for participants in the distribution channels, as they offer options to choose from.
Determination of prices for additional and auxiliary goods, as well as the price ratio of the entire range of related commodity groups, types of goods and their modifications. At the same time, great importance is attached to the selection of goods that will be accompanying, additional and prices for which will be set separately, as well as goods that will be completed with the main goods, their prices will be included in the price of basic goods.
Setting prices for mandatory accessories that complement basic goods. Such accessories can be, for example, spare parts, batteries, obligatory tools. As a result, a complex grid of prices is formed with their strictly correlated ratio across the entire assortment range of manufactured products, and the quality of the preparation of this grid will largely determine the success of the enterprise in the market. In order to lower prices for the main products and increase the efficiency of the enterprise, prices are also set for by-products and production wastes.
Formation of the price structure, that is, the unit of its measurement. It is determined by what principle and for what the price is set. The goal is to improve the efficiency of the entire pricing process. For example, you can set the price for renting a car based on the indicators: for 1 km of run, one day of rental. You can set the price per weight unit based on the content of the main substance in the product (iron in iron ore) or taking into account the content of foreign or unwanted impurities (sulfur in oil), etc.
calculating all possible options for discounts and surcharges or reducing and increasing the original price of the goods, depending on certain positive or negative conditions of purchase for the seller. Discounts are used to respond to lower prices from competitors, reduce overly large stocks, get rid of damaged, defective products, eliminate inventory, attract large numbers of consumers, stimulate product consumption, etc.

Modern pricing practice for both foreign and domestic enterprises uses two methods of pricing:

calculated;
market.

Calculation methods in turn, it can also be combined into two groups:

costly;
parametric.

Costly pricing methods- the most common. The popularity of this group of methods is explained, firstly, by the fact that Russian economy for a long time was in a planned administrative regulation, when such an important aspect of pricing as demand was not taken into account, and secondly, the fact that cost methods are based on the calculation of production and sales costs, therefore, the price formed by cost methods has a justification that is difficult to dispute. But it is precisely this validity that constitutes one of the most significant drawbacks of the cost-based approach, since it deprives the pricing process and the prices themselves of the necessary mobility, that is, it does not allow an immediate response to changes in market conditions. Cost pricing widely used in oligopolistic markets. It enables oligopolists to use the same cost structure, the same methods of calculating them, adding the same percentage of profit. Oligopolists can maintain the same level of prices in the market, while simultaneously changing the method of calculating them, which allows them to avoid being accused of collusion. In addition, the company often has more information about its costs (internal reporting of the company) than information about demand (information coming from external environment enterprises).

The scope of application of costly methods is very limited - they can only serve to determine the initial, base price of a product and substantiate the fact that a product is entering the market or organizing its release at an enterprise. To establish the final price for a product, it is necessary to take into account the factors of changing market conditions.

There are several costly methods for determining the price on a cost-plus basis:

full cost method;
direct cost method;
method of standard costs;
method focused on obtaining target profit;
method of profitability (profitability) of investments;
method of structural analogy;
aggregate method.

Full cost method. This method is based on the determination of the total cost, including both variable and fixed costs. In accordance with this method, the price is set by adding to the gross cost per unit of a particular product a markup corresponding to the usual rate of profit for the industry.

where Ts pi is the price calculated using the full cost method;

VI - gross costs;

NP is the rate of return per unit of production.

If the production cost is taken as the basis, then the premium should cover the cost of selling the product and ensure profit. In any case, the surcharge includes indirect taxes and customs duties that are passed on to the buyer.

The main advantages of the method are the maximum completeness of the inclusion of costs in the price of products and the ease of determining the price.

However, the full cost approach has two major drawbacks:

1) when setting prices, the existing demand for the goods and competition in the market are not taken into account, therefore, a situation is possible when the goods at a given price will not be in demand;
2) any method of attributing fixed overhead costs to the cost of goods (expenses for managing the enterprise, and not for the production of this product) is conditional. Fixed costs can be attributed to the cost in proportion to variable costs, in proportion to the cost of raw materials, labor, etc. The use of different approaches leads to obtaining a different value of the cost and, therefore, to a different price.

However, this method is most common in practical work and is used at enterprises with a clearly expressed commodity differentiation for calculating prices for traditional goods, as well as for setting prices for completely new goods (works, services) that have no analogues in the world. It is most effective when calculating prices for goods with reduced competitiveness.

In addition, the application of this method by all enterprises in the industry provides approximately the same price level, which reduces price competition compared to industries in which prices are directly determined by demand.

This method is most correct in relation to both sellers and buyers, since the interests of both parties are respected.

Direct (or marginal) cost method is based on setting prices by adding a certain markup to variable costs - profit. At the same time, fixed costs as expenses of the enterprise as a whole are not distributed among individual goods, but are paid from the difference between the amount of sales and variable costs of production. This difference is called “added” or “margin” profit. With the right approach, variable (direct) costs should be the limit below which no manufacturer will evaluate their products. In any case, the true cost function is to set a lower limit on the initial price of a product, while the value of that product to the consumer determines the upper limit on the price of it.

Selling goods at a price calculated using this method is effective at the saturation stage, when there is no growth in sales and the company wants to keep sales at a certain level.

Method of normative costs allows you to form prices based on the calculation of costs according to the norms, taking into account the deviation of the actual costs from the standard. The price for this method can be calculated using the formula

where C no - the price calculated by the method of standard costs;

НЖ - standard unit costs for i-th article costs;

О - deviation of actual costs from standard ones.

The advantage of the method of normative costs is the ability to manage costs based on deviations from the norms, and not on their total value. Deviations for each item are periodically correlated with financial results, which allows you to control not only costs, but also profits. The method provides a continuous comparison of costs and financial results, regardless of changes in production efficiency, deviations in the utilization of production facilities.

This method has great potential in terms of pricing. Prices determined on the basis of progressive or ideal standards (norms), on the one hand, orient firms to reduce costs, make it possible to determine what exactly needs to be done for this; on the other hand, such prices are most likely to be competitive in the market, since they reflect not only the individual characteristics of the company, but also the acceptable level of production efficiency.

Target profit-oriented method based on the fact that the company seeks to set the price of its goods at a level that would ensure the receipt of the desired amount of profit. In order to find out the required amount of profit, the company must find the optimal amount of goods that it will produce. To do this, you should consider different options for the price of products, compare them with production volumes and possible profit and choose the best option. The first step in determining the price by this method is to calculate the break-even point.

The break-even point is the volume of production and sales of products at which the enterprise does not make a profit, but also does not incur a loss. The breakeven point is defined as the intersection of the total revenue curve and the total cost curve. At the break-even point, the profit volume is zero.

Determining the price by this method takes place in several stages.

At the first stage, the break-even point is calculated in kind and in value terms.

The break-even point in value terms is determined by the formula

where T DB is the break-even point (sales volume) in value terms, rubles;

Z n0 cT - fixed production costs of the total volume of products, rubles / piece;

Z nep - average variable costs, rubles / unit.

The break-even point in kind is determined by the formula

where Т BN is the break-even point in kind.

In the second step, the unit price is calculated. The wholesale price of the enterprise per unit of production (C optpred) for a given volume of sales and target profit is determined by the formula

where U pl is a given volume of sales, units;

P c - target profit of the enterprise for a certain period of time, rubles / piece.

The volume of production (U pl) for a given amount of profit (P c) is calculated by the formula

The main disadvantage of the price determination method based on the break-even analysis is that the relationship between the price of a product and actual demand is not taken into account.

Return on investment method- the only method that takes into account the payment financial resources... The main task of this method is to estimate the total costs for various programs for the production of goods and determine the volume of output, the implementation of which at a certain price will recoup the corresponding investment. The established premium to the cost of production includes the percentage of return on capital invested.

where Ts ri is the price calculated using the target profit method;

VI - gross unit cost;

K - investment capital;

co is the percentage of income;

V is the volume of sales in physical terms.

This method is used in enterprises with a diverse range of products, each of which requires its own variable costs. Used for both traditional fixed price products and new products. It is used successfully when making decisions about the volume of production of a new product for an enterprise with a known market price.

Structural analogy method. The essence of this method lies in the fact that when establishing the price of a new product, the structural formula of the price is determined by its analogue. To do this, use actual or statistical data on the share of basic elements in the price or cost of a similar product. If it is possible to accurately determine one of the price elements for a new product, for example, material costs, consumption rates, etc., then by transferring the analog structure to a new product, an approximate price can be calculated.

Using this method to calculate prices for products of the same type based on statistical material, the structure of its cost is determined (more often it is determined specific gravity materials and wages in the total cost of the product). Knowing the absolute value of the corresponding costs for a new product, calculate its cost:

where C m - material costs per unit of a new product;

And m is the share of material costs in the cost price for a similar group of products.

Cost and price structure data can be used in setting rolling prices for sophisticated equipment for industrial purposes, which requires long-term manufacturing.

The dependence of the final price on changes in material prices and wage rates can be represented in the form of the following slip formula:

where C 1 is the price of products during the sliding period;

C 0 is the base price of the product;

A - the share in the price of material costs;

a () is the base price of materials;

a 1 - the price of materials during the sliding period;

B - share in the price of wages;

B x is the wage rate during the slip period;

B 0 is the basic wage rate;

C is the share in the price of other cost elements.

Aggregate method used in determining the price level for industrial units and for any goods popular consumption, consisting of different combinations of individual items, assemblies or components, the prices and cost of which are known, for example, services. The method consists in summing up the cost or prices of individual structural parts or product assemblies with the addition of the cost of the original assemblies or parts.

The price is calculated by the formula

where Ts a - the price calculated using the aggregate method;

Ts p - the price of structural elements or individual items;

n is the number of elements.

In domestic practice, costly methods are used in setting prices:

on principle new products when it is impossible to compare it with the output and the amount of demand is not known enough;
products manufactured according to one-time orders with individual characteristics of production (construction, design work, prototypes);
goods and services, the demand for which is limited by the purchasing power of the population (repair services, essential products).

The main disadvantages of the considered methods for calculating the price level are that they mainly reflect differences in costs and are weakly linked to consumer properties, quality and efficiency of using even interchangeable products.

Parametric methods pricing is based on taking into account the parameters of the product, with the help of which the effect of the use (use) of this product is determined.

The basis of parametric methods for justifying costs and prices is the quantitative relationship between costs or prices and the main consumer properties of products included in the parametric series.

A parametric range is a group of products that is homogeneous in design and manufacturing technology, has the same or similar functional purpose and differs from each other in the quantitative level of consumer properties.

Parametric pricing methods serve to compare different consumer values, orient buyers to purchase goods with the desired consumer properties, that is, such prices reflect the qualitative aspect of the production process. These methods make it possible to objectively determine the ratio of prices for mutually replaceable and similar products, as well as fairly reliably calculate prices for new goods within the existing range of homogeneous products.

The founder of parametric pricing in Russia is the Russian mathematician, mechanic and shipbuilder A. N. Krylov. Back in 1907, he proposed for a number of warship projects to calculate the average value of the main parameters characterizing their quality, and to consider the "average ship" (and now in the practice of world shipbuilding and international trade ships have adopted the term "standard ship").

The identified quantitative relationships between prices and the main qualitative parameters are used to determine how much the price level of a new product, calculated on the basis of production costs, fits into the price system of the domestic market, which reflects the qualitative differences between products.

Parametric methods are used to determine prices in world trade, where the competitiveness of products, their quality are the most important price-forming factor and where the use of an additional parametric approach allows firms to “fit” their products into the external market.

These methods are also a means of forecasting costs and prices.

Thus, parametric methods can be used:

to justify the price of a new modification, which is included in the parametric range of goods produced by the company;
justification of adjustments to prices, taking into account the prices and quality of competitors' goods.

Parametric pricing methods include:

scoring method;
method of specific indicators;
method of regression analysis.

Scoring method based on the use of expert assessments of the significance of technical, economic and consumer parameters of products included in a specific group of products (goods).

On the basis of expert assessments of the significance of product parameters for consumers, each parameter is assigned a certain number of points, the summation of which gives an integral assessment of the technical and economic level of the product.

Determination of prices by the point method is carried out in several stages:

1. Select the technical, economic and consumer parameters of the product group.
2. Determine the number of points for each selected option.
3. Determine the value of one point.
4. Set the price of the product according to the formula

where Ts n - the price of a new product;

n is the number of estimated parameters;

B Hi - the score of the i-ro parameter of the new product;

U. - the specific weight of the i-ro parameter of the product (estimated by experts for the basic product);

CO is the cost estimate of one point.

The cost estimate of one point is determined by the formula

where Ts b is the price of the basic reference product;

B 6i - score of the i-ro parameter of the basic reference product.

The conditions that must be met when using the scoring method are as follows:

products for which prices are set must be designed to meet the same needs;
products that make up a certain group must have a homogeneous technological process manufacturing;
all products must be comparable in terms of technical, economic and consumer parameters.

Despite the fact that this method allows for subjectivity in the expert selection of the comparison base (set of parameters) and assessment of the product quality level (parameter levels), it is advisable to use it in the formation of prices for food products, assessed by organoleptic properties.

Specific indicators method is used to justify the level and ratio of prices of products, the useful effect of which is sufficiently fully characterized by one parameter. Specific indicators reflect the unit price of the main technical and economic parameter. These parameters are: productivity, capacity, content of useful components, etc.

Specific indicators - quotient from dividing the cost or price by the value of the main quality parameter for each product of a given parametric series.

The general form of the formula by which the price of a new product is determined may be as follows:

where P g is the quantitative value of the main parameter of the new product;

C ud - unit price of the main parameter;

D - additional payments reflecting changes in other consumer properties of a new product;

К т0 рм - the coefficient of inhibition, which reduces the coefficient used by the company in order to make the purchase of its goods more profitable for buyers than for the goods of competitors, starting from the “price of indifference”. The coefficient is 0.5-0.8 for serial industrial products.

Regression analysis method is used to calculate prices for products characterized by a complex of technical, economic and consumer parameters. The main purpose of this method is to determine the dependence of a change in the price of a product on a change in the technical and economic parameters of a product.

To calculate the price, the formula is applied

where X p X 2, ... X p - product parameters;

n is the number of parameters of the i -th product.

The selected parameters should include those that appear in the standards and technical conditions... The set of the selected parameters should sufficiently characterize the design, technological and operational properties of the products.

The main disadvantage of using these methods is that they do not take into account all consumer properties of products and completely ignore supply and demand. If the prices for products already included in the parametric series were obtained by the same method, then this method cannot be used, since one of the conditions for using regression analysis is violated - the condition for the independence of observations.

However, this method can be applied to the forecast price.

Market methods for setting the price of a product. In contrast to costly pricing methods, which are based on production costs, which serve as the basis for determining prices, the basis of market pricing methods is demand.

It is believed that consumers determine the value of a product, its usefulness by the totality of properties possessed by the product presented on the market. The consumer compares the product of this enterprise with competitors' products according to criteria such as price, quality, appearance, availability, packaging, after-sales service, service level. Therefore, when pricing, it is very important to understand the psychology of the consumer, his perception of the product. As a result, the problem of producer costs fades into the background.

Focusing on demand as the basis for the formation of the price of a product, an enterprise inevitably faces the problem of measuring and forecasting demand. The next step is to determine the sensitivity of the consumer to prices, the change in the volume of demand depending on the change in prices, that is, the elasticity of demand.

Almost all enterprises, when forming a price for their products, are forced to take into account the demand factor in it, since if the price exceeds the level to which consumers agree, the product simply will not be sold.

The use of market methods involves a lot of work on the study of the market, demand, its elasticity, in connection with which the firm must have the financial capabilities and specialists for expensive research.

When studying potential demand, research is carried out to identify:

perceptions of price and “price affordability plug” for most buyers;
reactions to price changes (elasticity) using questions about the possibility of buying at different prices;
the possibility and necessity of differentiating prices in accordance with purchase costs, solvent, demographic, psychological and other characteristics of buyers.

The disadvantage of these methods is that the information is distorted due to the lack of the moment of purchase as fact.

Test sales can also be conducted. In this case, once an acceptable price range has been determined, the price is varied based on observing consumer responses to optimize the revenue-sales mix.

Auction prices for unique or prestigious items are also examples of demand-driven prices.

Market-based pricing methods include:

method of maximizing sales, taking into account the elasticity of demand;
method "focus on competitors";
method of setting the tender price;
auction method;
a method focused on determining the value of a product for a customer;
methods of "psychological" pricing.

Sales maximization method taking into account the elasticity of demand is based on the use of price dynamics in order to increase sales. In the case of applying this method, with elastic demand, a decrease in price is used as a sales stimulation lever, and with inelastic demand, an increase in price.

Leader-following method (“competitor orientation”). If there is a clear leader in the market, the rest follow. Moreover, price leadership can be dominant when there is a firm in the industry that has low costs, and therefore, clear price advantages over others. Or there may be barometric leadership, where the firm's price changes are supported by other manufacturers who recognize the leader's ability to set prices in full accordance with changing market conditions.

With this method, the manufacturer is guided by the prices of the competitor, and accounting for its own costs and demand plays a subordinate role here. The manufacturer sets the price of the product slightly higher or slightly lower than that of the closest competitor. This is only possible on a market with homogeneous products. By relying on this method, the firm gets rid of the risk associated with setting its own price in the sense of its acceptance by the market. In addition, in a highly competitive environment, the firm has little chance of influencing market prices. At the same time, in the conditions of a pure oligopoly, an enterprise has the practical ability to maintain its price for a long period.

When choosing a pricing method, it is necessary to take into account the competitive advantages of the enterprise. As stated earlier, proactive pricing is a winning behavior for an enterprise. Much attention needs to be paid to competitive advantages such as cost leadership and product differentiation. Cost leadership allows a manufacturer to set a lower price for its product than its competitors and still make a profit.

This can be achieved by saving:

on the assortment of products due to the inclusion of goods with a common set of costs in the firm's "portfolio": the more costs that are common for the goods, the more significant the synergy obtained from expanding the "portfolio";
due to the scale of production: there is a tendency to reduce costs as production volumes increase;
due to the accumulated experience associated with learning in the process of activity: how more company produces, the more she learns about how to make production efficient.

Product differentiation occurs when a firm produces a product that differs from competitors' products in some attractive features from the point of view of buyers. As a result, the firm has the right to increase the price depending on the presence of such distinctive features, and the price premium must exceed the costs incurred in connection with giving the product the distinctive features. Both the consumer properties of the product itself and the after-sales service can be unique.

Many products are sold at established standard prices, while their quality exceeds consumer expectations. In this case, the main competition revolves around the functionality of products sold at one standard price. This situation is characterized as flexible competition. The preference is given to the company that is able to provide the best consumer properties of the product at a given standard price. The most important factor in flexible competition is a company's ability to innovate quickly.

In reality prices various companies making similar products can vary significantly. There are several reasons for this discrepancy. One of them is various production technologies. Some companies' manufacturing facilities are better suited to fulfill a specific order, as a result of which companies receive cost benefits. Another reason may be the degree of loading with orders at the time of setting the price. Firms that are not fully loaded may charge reasonable prices in anticipation of additional orders.

Another reason for the significant price discrepancies is the different cost accounting and pricing methods. Many companies use valuation techniques that do not reflect the true level of their costs. Traditional methods of cost accounting in some cases distort the reality and can cause serious problems if prices are set on their basis. In large-scale production and in the manufacture of relatively simple products, traditional cost accounting methods lead to their underestimation, while costs are overestimated for small-scale and technically complex products. Thus, companies have no idea about the real profitability of certain products or sales.

Consequently, any company that has adopted more accurate cost accounting methods, for example by type of activity, will gain a competitive advantage.

If a company has not become a cost leader, it must know its real costs in order to compete in price.

Application of methods focused on demand and competition will give similar results if the company enters the market with the goods already on it in the absence of price collusion of competitors (the selling price of the goods corresponds to the demand price, and is not imposed on the market).

Method of setting the tender price used in cases where several companies are in serious competition for a certain contract. Competitors participate anonymously in the competition for proposals (tender). A tender is a written statement of the price by a firm, which is often submitted in a sealed envelope and opened by the tender commission at the time of the auction. When setting its price, the applicant proceeds primarily from the prices that, in his opinion, will be offered by competitors. The winner is the one whose offer price provides the seller who announced the tender the maximum profit. In countries with developed market economies, this method of determining prices is used when placing government orders and contracts.

Since competitive bidding is most commonly used for large projects, gains or losses can have a profound effect on a company's financial position, even its survival in the marketplace.

In such bidding situations, every aspect of pricing — costs, price sensitivity, and competition — remains uncertain. Informal estimates do not provide tendering companies with an adequate solution for developing a pricing strategy, which makes it particularly risky in competitive bidding situations. Therefore, companies prefer to use quantitative methods to increase the likelihood of ordering.

Quantitative analysis does not bring new data to solve the problem of competitive bids, but helps to check the meaning of the available information, to learn from past experience.

The firm compiles a list of possible bids and calculates the possible return associated with each of the bids offered.

The economic rationale for a bid for participation in the auction is associated with the choice of the price offered by the firm at which it can achieve the maximum value of the gain.

For the validity of this kind of calculations, it is fundamentally important to reliably determine the probability of winning the auction at different price levels. These probabilities can be assessed in different ways, depending on the information available.

The most fundamental approach requires information:

about the circle of participants in similar trades in the past;
the price levels offered by these participants;
about the price levels at which contracts were concluded with the winning bidders.

One of important factors to calculate the probability of winning - the number of bidders. The more firms take part in the tender, the more the price should be reduced in order to win the tender.

If the entire data set is available, you can use detailed methods for estimating probabilities, based on calculating the frequency of bidding by a particular competing firm. If trades are held for the first time in a given market, or the company, for some reason, cannot collect information about previous trades, then probability tables are built on the basis of only expert opinions, the basis of which is only a general economic analysis of information about possible competitors. Naturally, the reliability of such estimates is minimal and they can be used only in the most extreme case.

In the fierce competition, many bid winners actually suffer losses. Actual research in the Western market has shown that even those participants who use complex models and methods in setting prices often lose money. This is the so-called curse of the victors. Even if the firm has accurately calculated its costs and it and its competitors have offered prices that include normal profit, the winning bid is not a random sample of the bids that were made (assuming there were many firms participating in the auction).

It is most likely that in the winning bid, the firm underestimated its costs rather than overestimated them; therefore, the expected return on the order due to the fact that the firm won it is much lower than the yield expected to win. The solution to this problem is to add additional risk to the calculations, that is, an estimate of how much the firm underestimated its costs if it really wins the deal. Adding this factor will reduce the number of bids for which she will win, but to reduce her own losses, it is not at all necessary to win every bid.

Auction method for determining prices most often used to determine prices for products with unmatched properties.

Auction trading is a method of international and national trade, the participants of which specialize in the sale of goods that actually exist at the time of the transaction. At the auction, they sell consignments of goods (lots) sorted by quality. A sample is selected from each lot and a number is assigned to the lot. In international practice, such goods as furs, antiques, art objects, flowers, tea are sold at auctions. After that, a catalog is compiled and sent to potential buyers who will be present at the auction.

Auctions have their own characteristics that distinguish them from other types of trading and affect the pricing process:

auctions are held at fixed times;
before the auction, the buyer inspects the goods;
the initial price is set by the organizers of the auction at the highest possible level;
bidding at the auction can be held with an increase in prices or with a decrease (Dutch auction);
if the auctions are held with an increase in prices, then a minimum one-time markup is established, for which the traded buyers can increase the price (0.01-0.025%);
in an auction with a decrease in prices, the auctioneer lowers the price by a certain percentage;
many buyers take part in the auction;
price reflects fluctuations in supply and demand;
the price depends on the art of the auctioneer to bargain;
the price is higher than the market price of a similar product;
the auction price cannot serve as a basis for setting prices for other contracts;
the item sold in an auction is usually unique.

A method focused on determining the value of a product for

buyer. When forming prices, it is necessary to determine the buyer's sensitivity to price in order to identify the directions and methods of influencing it. By changing the level of price sensitivity, it is possible to increase the perceived economic value of a product and thereby ensure an increase in the volume of demand for it.

There are two pricing methods based on the perceived value of a product:

1) the method for calculating the economic value of the goods;
2) a method for assessing the maximum acceptable price.

Using method for calculating the direct economic value of a product For pricing purposes, the calculation procedure may include the following steps:

determination of the price of indifference, which is understood as the price of the best alternative goods available to the buyer;
determination of the parameters that distinguish this product both for the better and for the worse from the alternative product. The most frequently analyzed parameters are functionality, reliability, number of useful functions (content of useful or harmful substances or additives), commissioning costs (switching costs), maintenance costs. At this stage, the work should be carried out by specialists from different departments of the company: designers, technologists, marketers, etc .;
the study of the value for buyers of differences in the parameters of a given product and an alternative. At this stage, an attempt is made to determine the monetary value of the differences between the goods and the alternative, that is, the answer to the question is sought: how much more the buyer is willing to pay for this improvement in the goods and how much he estimates this or that deterioration of the goods in comparison with the alternative. Such estimates are usually obtained on the basis of interviewing expert merchandise sellers, buyers and conducting test sales based on the calculation of economic efficiency in the case when it comes to such quality characteristics of the product that can directly reduce or increase costs and affect the amount of profit. It is important to remember that only differences in the parameters of a given product and an alternative product purchased at the price of indifference are subject to assessment. In this case, either the cost savings of the buyer for obtaining a certain result (production output), or the benefit from obtaining additional utility at the same costs, should be assessed. Otherwise, a situation of double counting will arise, which will lead to incorrect decisions.

At this stage, the consequences of incorrect marketing decisions may come to light, when the product has a large number of useful properties, but the consumer does not agree to pay for which, as he considers them unnecessary;

Determination of the economic value of the analyzed product by summing the price of indifference with the estimates of differences. At the same time, it is recommended to set the price lower than the economic value, that is, with a certain premium to the buyer, stimulating the purchase. Thereby key point when deciding on the price level, it becomes not the entire economic value, but the economic gain of the buyer, that is, the benefit that he can receive from the purchase of a given product in comparison with an alternative one. Often, in addition to the economic premium, a factor that can tilt the price up or down from the economic value can be a reputation premium for firms known for the quality of their products, and, conversely, a discount for firms new to a given market.

Method for assessing the maximum acceptable price especially useful in the case of setting prices for manufactured goods when the benefit for the buyer is largely related to cost savings. The maximum price in this case refers to the price corresponding to zero cost savings. The procedure for determining it can be presented in the form of the following stages:

determination of the scope and conditions for the use of this product;
identifying the merits of a given product for a buyer or groups of buyers. Here it should be borne in mind that the same product may be of interest to the buyer with different characteristics, which is the basis for a pricing policy aimed at a specific consumer;
identification of additional (except for the price) costs of the buyer associated with the use of this product (costs of installation, maintenance, purchase of components, etc.);
setting a price that is profitable for the buyer (between the price of indifference and the maximum acceptable price).

It is important to note that the economic value obtained from this procedure does not necessarily translate directly into the price that the buyer will actually pay for the product. Under the influence of various factors that affect price sensitivity, the consumer may not fully appreciate the economic value of the product and refuse to purchase. In other words, the maximum acceptable price is the one that the buyer (or segment of buyers) would pay if he was fully informed about the economic value of the goods for him and was motivated by this.

Methods for determining prices based on the perceived value of goods by consumers can be recommended for use in those markets where a large number of interchangeable goods are simultaneously circulating and, therefore, it is possible to choose the most acceptable for a given buyer.

Methods of "psychological" pricing are based on the active use of the peculiarities of the psychology of buyers, therefore they are most widely used in the sale of consumer products. These methods include:

method of price breakdown;
method of price gifts.

The essence breakdown method lies in the fact that the seller announces not one, but several price indicators for a given product. Initially, the seller announces the price indicator that is most understandable and interesting to the buyer. For example, when selling furniture sets, the price tag is the price for the set itself. Then, when the buyer decides to conclude a purchase agreement, the seller announces additional indicators to him: prices for transportation, assembly. This method is most often used when selling relatively complex goods, the implementation of which is usually accompanied by additional services.

Another prime example of "psychological" pricing is method of price gifts.

At the same time, real and imaginary gifts are distinguished. Valid gifts are, in fact, price discounts and are used in the event of a threat of discontinuance due to obsolescence. The choice of a direct price discount or a valid gift is dictated by the peculiarities of the buyers' psychology.

However, they often resort to imaginary gifts. In these cases, when selling the main more expensive product, the seller offers a relatively cheaper product as a gift. The cost of the latter is included in the cost of the main product. This technique is widely practiced in the sale of goods that continue to be in demand in order to revive demand. As a gift, for example, cassettes are offered for the sale of video and radio equipment and films for the sale of photographic equipment.

The company, having chosen one of the considered methods, calculates the final price at which it intends to sell its products.

Questions for self-control

1. What are the main stages of determining the price of products?
2. Describe the calculation methods of pricing.
3. What pricing methods are market-based?
4. List and disclose costly pricing methods.
5. When are parametric pricing methods used? Price calculation formulas based on parametric methods; their advantages and disadvantages.
6. Describe the methods of "psychological" pricing.
7. Expand the features of pricing based on methods focused on determining the value of goods for buyers.

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

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

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

There are two methods of calculating markups: based on cost or sales price:

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

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

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

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

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

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

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

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

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

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

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

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

The methods for calculating prices are very diverse. There are costly, economic and market-based pricing methods.

Consider first and foremost costly pricing methods. Such methods provide the calculation of the selling price of goods and services by adding to the costs or the cost of their production of a specific value. E.A. Utkin divides this set of methods into:

1. The cost plus method.
2. Method minimum costs.
3. The method of pricing with an increase in the price by means of a premium to it.
4. Target pricing method.

One of the most common is the cost plus method. This method involves calculating the selling price by adding a fixed additional value - profit to the production price and to the purchase and storage price of materials and raw materials. This pricing method is actively used in the formation of prices for goods from a wide range of industries. The main difficulty in using it is the difficulty of determining the level

the additional amount, since there is no exact way or form of its calculation. Everything changes depending on the type of industry, season, state competitive struggle... The level of the added amount to the cost of goods or services that suits the seller may not be accepted by the buyer.

Costs are calculated per unit of output, and then average costs are determined, consisting of average fixed costs and average variable costs. They also determine the marginal costs, which make it possible to estimate the limits of changes in costs per unit of production in relation to the growth of production and sales.

Many managers prefer to set a relatively high initial price for a product being promoted in order to quickly recoup the costs incurred during its development and introduction to the market, when sales volumes are relatively small. However, as sales volumes increase, production and sales prices decline, while efforts to optimize distribution channels are intensified to minimize losses when organizing mass sales.

Another method is minimal cost. This method involves setting a price at a minimum level sufficient to cover the costs of producing a specific product, rather than by calculating the total costs, including fixed and variable costs for production and sales. The marginal cost is usually defined at a level at which it would only be possible to recoup the amount of the minimum cost.

Selling goods at a price calculated using this method is effective at the saturation stage, when there is no growth in sales, and the company aims to keep sales at a certain level.

Such a pricing policy is also rational during a campaign to introduce a new product to the market, when a significant increase in sales is to be expected. of the specified item as a result of offering it at low prices. Good results can be achieved when selling at low prices can lead to an active expansion of sales, and this gives a sufficient profit to the firm due to the scale of sales.

But, with the inept use of the method under consideration, the company is in danger of losses. Since the prices are determined by the suppliers of the goods, market demands and the state of competition are not always taken into account. In addition, despite the low price level, the consumer often refuses to purchase this product.

The next method is price markups. The calculation of the sales price in this case is associated with the multiplication of the production price, the purchase price and storage of raw materials and materials by a certain coefficient of added value according to the formula:

Unit cost = selling price * (1 + multiplier).

The specified ratio is determined by dividing the total profit from sales by the cost price. It is also possible to calculate this ratio by dividing the total profit from sales by the sales price.

Another method is target pricing. Otherwise, this method is called the method of determining the target price or determining the price in accordance with the target profit. On its basis, the cost per unit of production is calculated, taking into account the volume of sales, which ensures the receipt of the intended profit. If the prime cost is transformed due to a decrease or increase in the utilization of production capacities and sales volumes, indicators of the degree of utilization of production capacities are used, taking into account the influence

market conditions and other factors, after which they determine the selling price per unit of production, which, under these conditions, would provide the target profit. But with this method, the price is calculated based on the interests of the seller and does not take into account the buyer's attitude to the calculated price. Hence, the specified method needs some adjustment to take into account whether prospective buyers will purchase this product at the estimated price or not.

Market-based pricing methods include:

1. Method of the current price.
2. The "sealed envelope" or tender pricing method.

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

The sealed envelope method, or tender pricing, is used in industries where several companies are in serious competition to obtain a specific contract. When determining the tender, one proceeds primarily from prices that can be assigned by competitors, and the price is determined at a lower level in comparison with them. However, if a product has some qualities that distinguish it from competing products, or is perceived by buyers as another product, the price can be set flexibly, regardless of competitors' prices.

Market methods of price formation also include the method of determining prices, focused on finding a balance between production costs and the state of the market.

The economic methods of pricing include the following methods:

1. Method of specific indicators.
2. Method of regression analysis.
3. Point method.
4. Aggregate method.

The method of specific indicators is used to determine and analyze the prices of small groups of products, characterized by the presence of one main parameter, the value of which largely determines the overall price level of the product.

The regression analysis method is used to determine the dependence of price changes on changes in technical and economic parameters of products.

The aggregate method consists in summing the prices of individual structural parts of products included in the parametric range, with the addition of the cost of original components, assembly costs and standard profit.

pricing parametric demand competitor

Introduction

2.Pricing methodology

3.1

2Parametric pricing methods

4.2

Conclusion

Bibliography

Introduction

Under the conditions of market relations, price is the most important economic category that affects the economic situation of all business entities from individual individuals to the enterprise and the state as a whole. Regulation and self-regulation of the national economy is impossible without a well-functioning system of prices and pricing.

One of the decisive ways to increase the competitiveness of a trade organization is the optimal pricing mechanism and the establishment of factors affecting the determination of the price of goods.

Price is one of the main parameters of the competitiveness of a manufacturer's products. On how correctly an enterprise determines its pricing policy, chooses a pricing strategy, justifies the market price of its products, its competitive, and hence economic, position largely depends. Therefore, knowledge of the pricing mechanism, methods of setting and regulating prices for manufactured goods predetermine the feasibility of achieving both short-term and long-term financial and economic results of entrepreneurial activity.

Target test work: Consider the main methods of pricing.

To achieve this goal, it is necessary to solve the following tasks:

give the concept of price and pricing;

study the pricing methodology;

describe the main groups and types of pricing methods.

.Price and pricing: concept, essence

One of the key elements of a market economy are prices, pricing, price system, pricing policy and enterprise strategy, etc.

V general case price is an economic category, meaning the amount of money the seller wants to sell for and the buyer is willing to buy the product. In other words, price is the monetary expression of the value of a product. If the terms of the transaction provide for the exchange of one product for another, then the latter becomes the commodity price of the first product.

Hence, pricing is the process of setting prices for goods and services.

There are two types of pricing:

) market, in which prices are set mainly by producers;

) centralized (state), in which prices are set mainly by special government bodies and institutions.

In the real economy of any state (region), both of these types are always used. However, in market economy dominates the first type of pricing, and in the planning and distribution - the second.

The market price is formed under the influence of such factors as demand, supply, production costs, competition, government interference in pricing processes.

In general market demand for a product determines its maximum price, that is, the one that can be set by the enterprises distributing the product (sellers). Gross production costs (the sum of fixed and variable costs) determine the minimum price of goods, which can be set by manufacturing enterprises.

A significant influence on the formation of prices is exerted by market behavior competitors, their pricing policies and strategies, consumer characteristics of the product they offer and prices for specific products.

The most important factor in market pricing is also state regulation of prices and pricing mechanisms. In the general case, there are direct and indirect ways of government influence on the formation of the price of goods.

Direct (administrative) methods are the establishment of a certain pricing procedure for a specific product (product group). Indirect (economic) methods are aimed at changing market conditions, creating a certain position in the field of finance, currency and tax transactions, wages, etc.

In a market economy, the price and the processes of its formation occupy one of the main places. This is determined by many factors. For example, price is a significant parameter of the competitiveness of a product.

Pricing policy, pricing strategy of the enterprise, the price of goods are powerful instruments of competition. The price of the goods determines such economic indicators activities of the enterprise as income and profit, etc. However, the main thing is that the price, by its nature, is capable of realizing a number of important functions, without which the normal existence of the economic system is impossible.

2.Pricing methodology

pricing method parametric

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

3.Estimated pricing methods

3.1Costly pricing methods

Full cost price method. This method is based on the fact that the price of a product is formed as the total costs of production and sale, which, regardless of their origin, are written off per unit of production. The calculation is usually carried out in tabular form, where cost items and the amount of these costs attributed to a particular product are recorded. As a rule, costs are usually divided into direct, that is, directly and directly related to a given product, and - indirect, that is, those that cannot be directly and entirely attributed to a specific product. To attribute the latter to the cost of goods, use the method of distribution in proportion to labor costs, the ABC method, or other special procedures.

To implement this method, it is necessary to pre-establish a certain level of profitability for each product (assortment group of goods), which serves as the basis for calculating the amount of profit included in the price of the product. The level of profitability in modern conditions is not regulated by any regulatory documents, and therefore can be established by the management of the enterprise based, for example, on the adopted pricing policy.

Thus, the price of goods calculated according to this method is the total costs of the enterprise for the manufacture and sale of products plus the desired profit. Hence the second name of this method "Costs plus".

Its advantages include the following:

1) the basis for determining the price is the manufacturer's real costs per unit of production, to which the profit necessary for entrepreneurial activity is added;

) it is easy to set a minimum price limit, which is the sum of the total costs of production and sale of products;

) simplicity and consistency of calculations used in estimate planning, budgeting, etc .;

) any enterprise has all the information necessary for calculating the price in the form of accounting records, a system of economic and financial plans, and other internal company documentation.

Along with the advantages, disadvantages should be noted. price method full costs, namely:

) the producer's individual costs are not publicly displayed necessary costs for the production of this product, and, therefore, the price of the goods may differ significantly from its value, both upward and downward;

) the price calculated according to this method does not in any way reflect market demand, market conditions, consumer characteristics of goods and much more, which is the methodological and methodological basis of market pricing;

) application different methods the distribution of indirect costs (attributing their share to a unit of production) can significantly affect the value of the total cost of production, and hence its price;

) the use of the "desired" profitability indicator allows you to vary the amount of profit in unlimited amounts, which also affects the price of the product.

The application of this method is advisable either for monopolistic enterprises, or in conditions of single (custom-made) production, or in conditions of an acute commodity shortage.

Price method of standard (normative) costs. The essence of this method lies in the fact that for each element of the cost of production and sales of products, standards are established, for example, industry standards, both in kind and in value terms. The price is calculated using the full cost method, but using standard costs. The price calculated in this way can be called normative.

Based on the results of real production process deviations of the actual costs from the standard are tracked, which is the basis for adjusting the standard price. In this case, the recalculation is carried out only for those cost elements (calculation items) for which the deviations are recognized as objective. If no deviations have occurred for other cost items, then the company has the opportunity to change the standard price only by the amount of deviations.

The advantages of this method (along with those noted in the previous method) include:

) the ability to manage costs, since the very essence of the method is based on the use of factor-based analysis;

) more reasonable pricing (it is possible to single out dependent factors, that is, factors controlled by the enterprise and independent of the enterprise);

) standard costs can be adjusted close to socially necessary.

The main disadvantages of the standard cost pricing method are similar to the full cost method. Besides:

) continuous tracking and comparison of normative and actual costs is necessary, which is very laborious;

) a complex element of the standard cost system is the establishment and continuous adjustment of norms for all cost elements.

Since the first two methods are closely related in terms of computational techniques, the scope of their application is identical.

Direct cost pricing method. The essence of this method is that the price of a product is formed on the basis of direct costs of its production, as well as on the basis of market conditions and expected sales prices. In this case, it is assumed that all conditionally variable costs are direct costs that are directly written off per unit of production. Indirect costs are attributed to financial results enterprises. Therefore, this method is also called the method of pricing at reduced costs.

The calculation is carried out in tabular form. First of all, the table records the expected price of the product, which was established in the process of analyzing market conditions. Further, all direct costs are recorded (item by item) for the production of goods. The difference between the price of the goods and the total direct costs gives the financial result of the enterprise in the form of an indicator of gross profit (coverage). From here it is possible to calculate the indicator of gross profitability as the ratio of gross profit to the sum of direct costs.

The concept of this pricing method assumes that all indirect costs of the enterprise should be covered by its gross profit. If, as a result, the coverage of all costs (both direct and indirect) is achieved, as well as the “desired” profit is obtained, then the initial price can be taken as the estimated market price. Otherwise, either the original price or the amount of indirect costs for the enterprise should be adjusted. In this case, they proceed from the assumption that direct costs are technologically justified, and there is no need to optimize them.

) the price of the goods is more or less focused on market conditions;

) gross profit is a calculated indicator obtained by comparing two independent variables - the expected price of a product and the amount of direct costs of its production;

) on the basis of the calculated indicator of gross profitability, it is easy to identify the most profitable types of products for the enterprise;

) there is objective information for managing indirect costs.

The main disadvantage of this pricing method is that it is based on taking into account direct costs that are individual for each enterprise, since their value depends on the adopted organization and production technology, relations with suppliers and many other factors.

The scope of application of the price method of direct costs is single and small-scale production in conditions of sufficiently developed competition.

Pricing method of standard (normative) direct costs.

It is a methodological and methodological synthesis of the second and third costly methods.

3.2Parametric methods

Firms often feel the need to design and master the production of such products that do not replace the previously mastered, but supplement or expand the already existing parametric range of products. The parametric series is understood as a set of structurally and technologically homogeneous products designed to perform the same functions and differing from each other in the values of technical and economic parameters in accordance with the production operations performed.

Normative-parametric methods are methods for setting prices for new products depending on the level of their consumer properties, taking into account the standards of costs per unit of parameter. This group of pricing methods includes:

) method of specific indicators;

) method of regression analysis;

) aggregate method;

) scoring method.

This method can be used to justify the level and price ratio of small parametric product groups that have a simple design and are characterized by one parameter. It is extremely imperfect, since it ignores all other consumer properties of the product, does not take into account alternative ways of using the product, and also completely ignores supply and demand.

The method of regression analysis is used to determine the dependence of price changes on changes in the technical and economic parameters of products related to a given series, and to build and align value ratios.

This method makes it possible to simulate the change in prices depending on their parameters, to strictly determine the analytical form of the relationship, and to use the calculated regression equations to determine the prices of products included in the parametric series. The regression analysis method is more accurate, more perfect among other parametric methods. Linking prices to quality is achieved using economic-parametric techniques and computer technology.

The point method is that, based on expert assessments of the significance of product parameters for consumers, each parameter is assigned a certain number of points, the summation of which gives a kind of assessment of the technical and economic level of the product. It is irreplaceable in cases where the price depends on many quality parameters, including those that cannot be quantified. The latter include the following qualities: product convenience, aesthetics, design, environmental friendliness, fire resistance, organoleptic properties (smell, taste, color), fashionability.

4Market-based pricing methods

4.1Consumer-centric pricing methods

Enterprises that use consumer-oriented market methods are primarily focused in their pricing practice on the value perception of the consumer of their products and on the prevailing level of demand for the product.

The method of calculating the price based on the economic value of the goods is based on taking into account the value economic effect received by the consumer in case of purchasing a specific product.

The pricing procedure using this method consists of the following steps:

) determination of the economic effect associated with the use of goods in this group;

) determination of all parameters that affect the magnitude of the economic effect and are common to all competing goods, including the goods of this manufacturer;

) calculation of consumer preferences by particular parameters of the analyzed goods and assessment of the integral value for the buyer of each product;

) calculation of the price of indifference based on the integral value of the differences of all analyzed goods.

The maximum acceptable price method is used in setting prices for standardized manufactured goods, when the main benefit to the buyer is cost reduction. At the same time, the maximum allowable price is understood as such a price at which the buyer has zero cost savings in the process of using the goods.

The procedure for determining the price of goods using this method is reduced to the following calculations:

substantiation of possible options for use and conditions for the use of this product;

identification of all non-price advantages (benefits) for the buyer when using this product;

identification of all non-price costs of the buyer when using the goods;

setting the price of a commodity subject to the balance of "dignity-cost".

2Methods focused on characterizing the demand for a product

The method of pricing based on the analysis of caps is most often used by enterprises operating in an imperfect, immature market. A characteristic feature of such a market is the high price elasticity of demand, when even with a slight increase in price, the volume of sales significantly decreases, and when it decreases, on the contrary, it increases. In this case, the company tries to determine the price in the area of the coincidence point of marginal income and expenses, that is, at a level that ensures the achievement of the highest profit.

Having found the sales volumes corresponding to this point, the current price of the goods is determined from the demand curve.

Using the method of determining a price based on the analysis of limits is associated with certain difficulties:

the company must be able to accurately distinguish between fixed and variable costs in order to calculate the limit values and establish the optimal sales volume;

it is necessary to have a sufficient amount of information to accurately plot the demand curve (demand equation);

the demand in the market should indeed be mainly influenced by price changes, and the volume of consumption should correspond to the price level.

Due to this, the method of determining the price based on the analysis of the limits is used quite rarely, since it allows setting only a certain level of the possible price.

The method of determining the price based on the analysis of the peak of losses and profits is based on the establishment of such a volume of production (sales) at a fixed price, when the total amount of profit and the total amount of costs are equal. This method of setting prices is advisable when the pricing policy of the enterprise is aimed at maximizing profits.

3Competitive Pricing Methods

The peculiarity of these methods is that the price of the goods is calculated taking into account the competitive situation in the market and the level of competitiveness of the given enterprise.

The method of following market prices is based on the fact that each seller, acting in a given market, sets prices for his goods, proceeding from the actually existing current level of market prices, and at the same time does not significantly violate it. If a particular seller enhances the differentiation of his goods in relation to competing goods, then he has the right to set a price that differs from the usual price level in this market. For this reason, this method is usually used if the goods are standardized, for example, cement, sugar, etc.

As a result, each seller acts in a special price zone, set by him independently, but taking into account the prevailing price level in the market. It should be remembered, however, that any agreement to agree on the price level is illegal from the point of view of antitrust law.

The method of following the leader's prices presupposes the presence of an enterprise dominating the given market, which allows him to dictate market conditions, including in the field of pricing.

Then the rest of the enterprises secretly determine their prices based on the price level of the leading enterprise.

Typically, enterprises that follow the leader in shaping their pricing policy have a low level of competitiveness.

Therefore, they have no choice but to keep prices for their products at the level set by the leader. As a result, although competing enterprises do not conclude any agreement on prices among themselves, in practice it turns out that goods are sold by them at prices that are at a certain, as it were, agreed level, that is, market prices are averaged.

In reality, several price levels are not set depending on the competitive position of the given enterprise in the market, its ability and the degree of differentiation of the goods in relation to the goods of the dominant enterprise. In most cases, there is such a situation when the prices of each enterprise turn out to be limited to certain limits and at the same time are not higher than the corresponding prices of the leading enterprise.

Pricing method based on the usual, accepted in practice this market prices. Habitual prices are considered for a certain group of goods, which remain at the same level over a long period of time in a fairly wide market space.

A feature of these prices is their high elasticity. A change in the level of usual prices occurs in cases when, for one reason or another, among buyers and / or sellers the opinion is spread that the usual level of product quality has changed, its functional properties have expanded, design has improved, etc. That is, they give the product a new attractiveness and thus transfer it to a different price group.

Prestigious pricing is inherently analogous to the previous method, with the only difference that it applies to goods belonging to a special group. There are goods and services with an increased level of quality, the so-called representative class (jewelry, certain brands of cars, furs, etc.).

The main value of these goods is to emphasize a certain status of their owner. If these goods are sold at regular prices available to the average consumer, then they will lose their main use value - elite. Therefore, it is not possible to sell them at low prices. In addition, low prices for such goods may raise doubts about their quality, as well as the effect of exclusivity and special inaccessibility of the goods will be lost. These goods are initially priced higher, and thus signal the special status of both the goods and their potential buyers.

For the successful application of this pricing method, the enterprise must win and subsequently continuously maintain the image of the ultra-high-end manufacturer in relation to the goods sold.

The competitive (tender) pricing method is used in various types of tenders. A feature of the conduct, which is that a large number of buyers tend to buy a product from one or a small number of sellers, or, conversely, when a large number of sellers seek to sell a product to one or a small number of buyers. If the trades were organized by the sellers and the competition is between the buyers, then the buyer who wrote the highest price wins. If buyers are bidding and the competition is between sellers, then the seller who sets the lowest price wins.

A variation of the adversarial pricing method is the auction price determination method, which is used in commodity markets, securities markets, etc.

When using the increasing method of conducting an auction, the lowest price is called first, and then it is increased. The goods go to the one who named the highest price;

When using the downward (Dutch) method of conducting the auction, the highest price is called first, and if the buyer is not found at that price, then the price goes down. In this case, the right to conclude a sale and purchase transaction for this product is acquired by the buyer who first accepts the seller's price and thereby agrees to the highest price in comparison with the rest of the auction participants.

Competitive pricing methods are considered by many business leaders to be the most effective. There are several reasons for this:

there is no need to carry out complex analytical calculations that require the involvement of highly qualified workers;

the level of entrepreneurial risk, which is inevitable when setting one's own price, is reduced;

the price change is not related to the dynamics of own costs or demand, but is related to the price actions of competitors.

Conclusion

From all of the above, the following conclusions can be drawn:

Price is an economic category, meaning the amount of money the seller wants to sell for and the buyer is willing to buy the product.

In a market economy, the price and the processes of its formation occupy one of the main places.

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

All pricing methods can be divided into two groups: settlement and market.

The essence of the calculation methods of pricing is that they are based, first of all, on the basis of the internal conditions of production at a particular enterprise, without taking into account the requirements of the market environment.

A feature of market pricing methods is that the basis for calculating prices is, first of all, taking into account external factors (consumer attitude to the product, assessment of the competitive situation in the market, etc.). The costs of production and sales of products are considered by the management of the enterprise only as a limiting factor, below which the sale of this product is economically unprofitable.

Bibliography

1.Lev M.Yu. Pricing - M .: UNITY-DANA, 2011

.Vasyukhin O.V., Fundamentals of Pricing - St. Petersburg: St. Petersburg State University ITMO, 2010

.Pricing: workshop / G.A. Makhovikova, I.A. Zheltyakova, N.Yu. Puzynya. - M .: Eksmo, 2008

.Belokonskaya E.G., Pricing: tutorial/ Ivan. state chem.-technol. un-t - Ivanovo, 2009

.Dmitriev DV, Fundamentals of pricing: textbook. allowance - Perm: Publishing house of Perm. state tech. University, 2010

.V.V. Naumov Pricing - M .: MIEMP, 2010

.Krivtsov A.I., Pricing: a tutorial (electronic). - Samara: Samara Institute (branch) RGTEU, 2011

.Akhmetova M.I., Pricing policy of the enterprise: textbook - PNRPU, Faculty of Humanities, Department of Financial Management, 2011.

.Lipsits I.V., Pricing: textbook-practical. manual - M.: Yurayt Publishing House, 2011

When using market pricing methods, production costs are considered as a limiting factor, below which the sale of this product is economically inexpedient.

An enterprise that uses market-based pricing methods with a customer focus, first of all, takes into account the following indicators:

the current level of demand for the product;

elasticity of demand;

value perception by the consumer of their products.

From the position economic sciencevalue is defined as the general economic satisfaction received by the buyer as a result of the consumption of the goods acquired by him, that is, the benefit that this good will bring him.

V marketing under perceived value the assessment of the desirability of a good is understood, which in monetary terms exceeds the value of this good. In this case, the measurements are based on utility ratios and prices goods that are actually available to the buyer among alternative options.

1. Methods of pricing, based on the perceived value of the product, are based on the value of the economic effect received by the consumer during the use of the product.

These include methods:

calculating the economic value of the goods;

estimates of the maximum acceptable price.

Price calculation procedure according to the method of calculating the economic value of the goods includes the following steps:

definition:

the price (or cost) associated with the use of the good that the buyer is inclined to consider as the best alternative available to him;

all the parameters that distinguish this product both for the better and for the worse from the alternative product;

assessment of the value for the buyer of the differences in the parameters of this product and the alternative product.

Under the maximum price in case method for assessing the maximum acceptable price we mean the price corresponding to zero cost savings (for the buyer), that is, the more the price rises relative to a given level, the stronger will be its rejection for the buyer.

Pricing procedure according to the assessment method, the maximum reasonable price boils down to this:

identification of all non-price :

advantages for the buyer;

costs for the buyer when using this product;

establishment:

a set of definitions and conditions for the use of goods;

the level of equilibrium "dignity-cost".

2. Focusing on demand as the basis for the formation of the price of a product, an enterprise inevitably faces the problem of measuring and forecasting demand. The next step is to define consumer sensitivity to prices, changes in demand volumes depending on price changes, i.e., it is necessary to consider elasticity - characterization of the sensitivity of consumers in relation to the product.

To determine the elasticity, the coefficients of the elasticity of demand are used:

by income;
cross elasticity.

Let's consider each of the listed indicators in detail.

Coefficient of direct price elasticity of demand (Ес) shows how many percent the demand will increase (decrease) when the price of a product changes by 1%:

where:

relative change in demand volumes;

relative price change.

The relative change in price shows how much a given price value has changed in relation to the previous, average or present value of this value.

For the convenience of working with this coefficient, its absolute value is often considered.

Different values of the coefficient are possible:

Ес = 0- demand is absolutely insensitive to price. Whenever the price rises or falls, demand will remain constant. Goods of such demand are called absolutely inelastic;

Ес = ~(infinity) - the demand for the product is absolutely elastic. Any arbitrarily small change in price leads to a change in demand;

EU= 1 - an increase (decrease) in the price of a product by 1% leads to a decrease (increase) in demand for a product by 1% as well. This elasticity is called single;

Ес> 1 - demand for a product is elastic, since an increase (decrease) in the price of a product by 1% leads to a decrease (increase) in demand by more than 1%;

EU< I - demand is inelastic, since an increase (decrease) in the price of a product by 1% leads to a decrease (increase) in demand by less than 1%.

The price elasticity of demand depends on the following factors:

the more substitutes for goods, the greater the elasticity of demand for this product;

the more unique, individual the need that the product satisfies, the lower the elasticity;

the more aggregated (united in a large group of similar goods) a product is, the less price elasticity of demand;

the more scarce a product is, the lower the elasticity of demand for it;

over time, demand becomes more elastic;

it is beneficial for the enterprise that in short term time, demand was more elastic, and in the long run - less elastic, since this makes it possible to effectively manipulate prices;

with an increase in the price of a product in conditions of inelastic demand for it, the profit of the enterprise increases;

with a decrease in the price of a product in conditions of elastic demand for it, the profit of the enterprise increases.

Demand elasticity coefficient for income (Unit) shows how many percent the demand will increase (decrease) with an increase (decrease) in consumer income by 1%:

where Before- the relative change in consumer income, and the relative change in the volume of demand.

The analysis of the income elasticity of demand is equally important, than analyzing the price elasticity of demand, since he :

gives the company important information regarding the growth or decline in the purchasing power of consumers;

allows you to group (segment) consumers by income level.

Since an increase in consumer income is usually accompanied by an increase in demand, the income elasticity of demand has a positive sign.

Cross elasticity coefficient (Eab) shows the percentage change in the demand for a given product when the price of another product changes by 1%:

The Eab coefficient can have both negative and positive signs, depending on such types of goods as:

complementary: for their cross elasticity less than zero(Eab< 0). Это значит, что с ростом цены на товар В объем спроса на товар А сокращается и наоборот;

interchangeable: for them, cross-elasticity has a positive value (Eab> 0), that is, with an increase in the price of product B, the demand for product A increases;

neutral towards each other: for them the cross elasticity is zero (Eab = 0). This means that an increase in prices for good A will not cause a change in demand for good B.

When using the coefficients of elasticity of demand in pricing practice, an enterprise has to deal with op certain difficulties therefore market-based pricing methods using these ratios are not always popular:

When using indicators of elasticity of demand for price and income, the influence of a large number of other factors that form the perception of buyers about the value of goods, the so-called factors of tastes and preferences of consumers, are not taken into account, since these factors, as a rule, are not quantitatively expressed. Among such factors, one can single out, for example, the adherence of consumers to a certain brand of goods and the tradition of consuming products;

it is often difficult to collect information to reliably estimate demand and its elasticity;

pricing methods based on the criterion of elasticity are unacceptable for new products for which consumers have not developed tastes, preferences and consumption traditions;

the influence of production costs is shifted to the background, the main thing is that the price does not fall below the level of these costs. The price for the same product, produced at the same costs, can vary significantly depending on the current value of elasticity.

On the positive side using the criterion of elasticity is the ability to experiment with prices, provide flexibility, mobility of pricing, increase the speed of reaction to changes in the market situation, which cannot be provided by costly methods of pricing.

3. In addition to pricing using elasticity coefficients, market pricing methods include method current prices (method with orientation of prices to competitors). An enterprise sets prices for its goods in the same way as other enterprises do, and tries to control its costs to a greater extent. This pricing method is common in oligopolistic markets, as well as in markets where there is fierce competition among sellers or manufacturers of homogeneous products.

This method is subdivided into several groups of sub-methods:

following prices:

market (setting prices slightly below the level of competitors' prices);

at the prices of the market leader;

determination of prestigious prices.

Under prestigious pricing as one of its varieties, it is also understood to set prices for goods sold at a high level in comparison with competitors using the image of a trademark (brand).

4. Tender pricing method used in industries where several companies are in serious competition for a specific contract. When determining the tender, one proceeds primarily from prices that can be assigned by competitors, and the price is determined at a lower level in comparison with them.

However, if a product possesses some qualities that distinguish it from competing products, or is perceived by buyers as another product, the price for it can be set flexibly, regardless of competitors' prices.

The method of pricing in the auction assumes a situation when a large number of buyers seek to buy a product from a limited number of sellers, or vice versa - when a large number of sellers seeks to sell a product to one or a limited number of buyers. The price of the goods is determined once in the presence of both parties.

5. Market methods of price formation also include a method of determining prices, focused on finding a balance between production costs and the state of the market.

Consider the algorithm for this pricing method:

based on the capacity of the company, a plan for sales is determined, in accordance with which production costs are calculated. To make the right decision on prices, the structure of costs (fixed and variable) should be determined in as much detail as possible, since this information can be used to calculate on the basis of variable costs, which are an important tool in deciding on the price level;

based on the study of demand, the level and ratio of prices for similar types of products produced by the firm and competitors, the planned price and the corresponding profit are determined, which will begin to form only after the reimbursement of fixed costs;

Based on the demand function, various sales tactics are worked out by analyzing various combinations of "price - sales", and the one that provides a marginal profit (the difference between revenue and variable costs) is selected. At the same time, one must be sure that the projected sales volumes at different prices will correspond to real conditions. At this stage, the choice of price is preliminary, since when calculating sales volumes, one must take into account the actions of competitors and the real capacity of the market;

an assessment of the strength of the position of the product and the reputation of the company on the market in comparison with competitors is carried out, as well as the assessment of the competitiveness of this product according to the technical and economic parameters of the product using parametric methods (see the question "Characteristics of parametric pricing methods"). It is also determined to what extent the price level, calculated on the basis of production costs, fits into the scale of market prices for similar products (higher or lower, taking into account real parameters);

the so-called the price of indifference that is, the price at which the buyer will not care what product to buy: this product or a competitor product. This is done using a set markup (or discount) level to the price, which will exactly match the difference in the assessment of the parameters of this product in comparison with competitive models;

the price set taking into account the described algorithm should be adjusted in accordance with the requirements to ensure a given level of profit and the current market situation. It may be necessary to work out various combinations of "price - volume of sales", but always taking into account competitive factors identified in the previous stages. After that, a combination is selected that fits into the scale of market prices, corresponds to the position of the company in the market and provides the maximum profit under these conditions. In this case, one should pay Special attention the answer to the question about the possible actions of competitors.

At the same time, it must be borne in mind that the manufacturer must provide a certain price ratio not only in relation to competitors' products, but also to other products of the given firm. It is necessary to set its own price for each of the assortment models, taking into account the fact that buyers are divided into groups depending on the level of their requirements, and each market segment has its own unique elasticity of demand.

6. Thus, when setting prices within the product range, it is necessary to determine price lines associated with the sale of goods in a range of prices, where each price reflects a certain level of quality of different models of the same type and purpose of the product. Many types of products traditionally have price scales to which manufacturers and sellers are adjusting. When developing a new product, the company must decide to which category the new product will belong.

When developing a price line, consider the following rules:

prices should be sufficiently separated from each other so that consumers are aware of the qualitative differences between models; otherwise, they will perceive the lower value of the price as the most suitable for themselves and proceed from the fact that there are no differences between the models;

there should be a lot of differentiation in the upper price range, since consumer demand is less elastic at a high price;

the ratio of prices between varieties of goods must be maintained with changes in costs in order to maintain the established differences.

Price lines create benefits for both producers, channel participants and consumers. Sellers can offer a set of products, attracting different market segments, offer consumers more expensive models within the existing price range, control stocks using prices, neutralize the behavior of competitors by offering models across the entire price range, and thereby increase the total volume of sales. This gives consumers an assortment of products from which they can select the desired products by comparing specific models within the desired price range.

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