Pricing and pricing policy. Theoretical approach to the formation of an enterprise's pricing policy

Price policy is the art of price management and pricing. With the help of pricing policy, prices for goods (services) should be set, taking into account the position of the product and the company in the market, as well as allowing the strategic and operational goals of the company to be achieved. Pricing policy is implemented through pricing strategies and should be considered only in the context of the overall policy of the company.
Pricing policy is important element marketing complex. She
is formed in close connection with the planning of goods and services, identifying the needs and requests of consumers, organizing sales, and stimulating sales. The price must be set by the enterprise in such a way that, on the one hand, it satisfies the needs and requirements of customers, and on the other hand, contributes to the achievement of its goals and ensures the supply of sufficient financial resources.
Despite the fact that non-price forms of competition are also widespread, price is an essential element of competition policy and has a significant impact on the market position and income of the entrepreneur.
Hence the urgent need for successful entrepreneurial activity in a market economy, the use of a well-developed and scientifically based pricing policy becomes necessary.
Example. However, the vast majority of managers of Russian enterprises do not yet have sufficient knowledge and experience in the development of pricing policies. When setting prices, they usually focus on the costs of production, sales of products and making some profit. A number of entrepreneurs take the prices for similar products established on the market as a guideline. There are also those who, without delving into the essence of the problem, simply try to sell the product as expensive as possible.
Pricing policy consists of setting prices for goods and services depending on the prevailing market conditions, ensuring the intended amount of profit and solving other strategic and operational tasks.
The pricing policy of an enterprise is a multifaceted concept. The company does not just set this or that price, it creates its own pricing system, covering the entire range of products and taking into account differences in production and sales costs for certain categories of consumers, for different geographic regions, specificity in demand levels, seasonality of product consumption and many other factors . In addition, it should be remembered that the company operates in a constantly changing competitive environment. Sometimes the company itself takes the initiative to change prices, but more often it simply reacts to the actions of competitors.
The pricing policy is formulated taking into account the following issues:
What price would a buyer pay for the product?
How does a change in price affect sales volume?
What are the constituent cost components?
What is the nature of competition in the market segment?
What is the level of the threshold price (ensuring break-even activity)?
What discount can be provided to customers?
Will home delivery and other issues affect the increase in sales?
The most common pricing mistake is an excessive focus on costs, which does not allow the enterprise to adapt to changing market conditions and the requirements of various market segments.
To properly use all the advantages of market pricing in business, it is necessary to study the essence of pricing policy, the sequence of stages of its development, the conditions and advantages of their application.
A firm's pricing policy represents the overall goals that a company intends to achieve by setting prices for its products.
However, setting prices for a firm's products is largely an art:
low price causes the buyer to associate with low quality of the product,
high - excludes the possibility of purchasing the product by many buyers.
In these conditions, it is necessary to correctly formulate the company’s pricing policy, keeping in mind the relationships (Figure 1).


The development of a pricing policy includes several successive stages:
development of pricing goals;
analysis of pricing factors (determining demand, analyzing supply and competitors’ prices, etc.);
choosing a pricing method;
making a decision on the price level.
Each step of setting a price is associated with certain problems and difficulties that a thoughtful entrepreneur should know about in advance

More on the topic Pricing policy:

1. 7.2 Pricing policy of a transnational company and main pricing factors
2. Chapter 8. Product development, pricing and pricing policy
3. Methodology for setting prices for enterprise products. Choosing a pricing policy in a competitive environment
4. Lecture No. 28 Topic: The essence, composition and price structure of the enterprise’s products. Pricing policy of the enterprise
5. 5. Price elasticity of demand. Total revenue indicator and elasticity of demand. Factors of price elasticity of demand
6. § 5. Main points of the State Bank's policy. - Monetary policy. - Credit policy. - Discount policy. - Credit plans.

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5. PRICING POLICY

Price policy- this is the management of the enterprise’s activities in establishing, maintaining and changing prices for manufactured products, carried out in line with the marketing concept and aimed at achieving its goals.

The type of market in which it operates has a significant impact on the formation of an enterprise's pricing policy. The basis for determining the type of market is the number of firms operating in the market. The analysis parameters also include: the type of product (the degree of its homogeneity and standardization), price control, conditions for entry into the industry, the presence of non-price competition, and the importance of marketing.

Based on the analysis of these parameters, four main types of market are distinguished: a pure competition market, a monopolistic competition market, an oligopolistic market and a pure monopoly market (Table 26).

A purely competitive market consists of many sellers and buyers of a standardized product. There are no serious legal, organizational, financial or technological restrictions for entering the industry. Since each firm produces a small portion of total output, none of them has much influence on the price level. Sellers in such markets do not spend much time developing a marketing strategy, since its role in such a market is minimal.

The number of firms operating in the monopolistic competition market is large, but much smaller than the participants in pure competition markets. As a rule, these are 20-70 enterprises. Entry into the industry is quite easy. Transactions in such a market are made in a wide range of prices. The presence of a price range is explained by the ability of manufacturers to offer customers different product options. Products may differ in quality and external design. Differences may also lie in the services accompanying the goods. Buyers see differences in supply and are willing to pay different prices for products. Control over prices is limited, since there are enough firms that the share of each in the total market is small. In such a market, the use of marketing measures is of great importance, but they have less influence on each individual firm than in an oligopolistic market.

Table 26

Characteristics of market types

An oligopolistic market consists of a small number of producers (usually 2 to 20) who are sensitive to each other's marketing strategies. The small number of sellers is explained by the fact that it is difficult for new applicants to penetrate this market due to the presence of a set of barriers: the need for large initial capital, ownership of patents, control over raw materials, etc. Products in such a market can be standardized (steel) or differentiated (automobiles). The degree of price control, exercised in various forms, is high.

In a pure monopoly, there is only one seller in the market producing a product that has no close substitutes. It may be a government entity, a private regulated monopoly, or an unregulated monopoly. A state monopoly can use price policy to achieve a variety of goals. A regulated monopoly is allowed by the state to set prices that ensure a “fair” rate of profit. An unregulated monopoly sets its own prices. Entry into a monopoly industry is blocked by various barriers.

Thus, each type of market has its own mechanisms, so the implementation of the same actions in the field of pricing policy in different markets leads to different results and has different meanings.

The method of establishing the initial price of a product consists of six stages.

1. Setting pricing objectives

Pricing objectives arise from the goals and objectives of the enterprise’s overall marketing policy. The main goals are presented in table. 27.

Table 27

Pricing policy goals

2. Determining the level of demand

Demand depends on price, and the degree of this dependence is determined by elasticity. Elasticity of demand– a quantitative characteristic of demand, reflecting a change in the quantity of demand in response to a change in the price of a product or some other parameter. The following types of elasticity of demand are distinguished:

direct price elasticity of demand;

income elasticity of demand;

cross price elasticity of demand.

3. Cost Estimation

The level of costs for the production and sale of goods allows us to determine the minimum price that the company must set to cover them.

4. Analysis of prices and products of competitors

The firm's price setting is influenced by the prices of its competitors' products. Focusing on a comparative analysis of the quality of competitors' products and their prices, the company has the opportunity to determine the average price range for its products.

5. Selecting a Pricing Method

The most common pricing methods are: cost plus markup, break-even analysis and target profit, pricing based on the perceived value of the product, pricing based on the level of competition, aggregate and parametric methods.

The “cost plus markup” method is the simplest method of pricing; it involves adding a certain markup to the full cost of the product. The prevalence of this method, in addition to its simplicity, is also determined by the fact that manufacturers are more aware of costs rather than demand. This method is considered fair; if all sellers use it, then prices for similar products are similar.

At the same time, the “cost plus profit” method also has significant disadvantages: it is not related to current demand and does not take into account the consumer properties of goods. In addition, total costs include fixed costs not associated with the production of a specific product; the methods of their distribution among products are conditional and can lead to price distortions.

Determining the price based on break-even analysis and ensuring the target profit is based on setting a price level that will provide the company with the desired amount of profit. Determining the price using this method can be done by calculation and graphically.

The obvious advantage of this method is to provide the company with a planned amount of profit. The disadvantage is that this method does not take into account the price elasticity of demand. Its use can also lead to a distortion of the real picture due to the conditional distribution of fixed costs among individual products.

The perceived value pricing method considers the consumer's perception of the product as the main factor taken into account. To form in the minds of the consumer the desired idea of ​​​​the value of a product, non-price methods of influence are used.

Competition-based pricing (current price method) considers competitors' prices as the starting point when setting prices, while own costs and demand levels are taken into account only as additional factors. This method is especially popular in pure and oligopolistic competitive markets. In an oligopolistic market, this method is embodied in the “follow the leader” policy.

The aggregate method is used for goods consisting of individual products or units (parts) and consists of simply summing the prices for individual elements goods.

The parametric method is based on determining the price of a product based on a comparative formal analysis of the characteristics of the product in relation to the similar characteristics of the base product with a known price.

6. Setting the price

By using the selected pricing method, the initial price of the product is determined.

7. Development of dynamics of changes in the initial price of a product

The dynamics of changes in the initial price of a product depends on the chosen strategy. When changing the price of new products, two main strategies are used: “cream skimming” and “strong introduction”.

The “cream skimming” strategy consists of initially setting a high price for a new product based on narrow market segments and then gradually reducing the price to gradually cover other segments. A “robust penetration” strategy is based on using initial low prices to reach the widest market with the possibility of increasing prices later.

When developing price dynamics for existing products, two main types of strategies can be used: a rolling falling price strategy and a predominant price strategy.

The sliding falling price strategy is a logical continuation of the skimming strategy and consists in the fact that the price consistently slides along the demand curve, changing depending on the market situation. The preferential pricing strategy is a continuation of the strong implementation strategy, its essence is to achieve an advantage over competitors in terms of cost (then the price is set below the competitors' prices) or quality (then the price is set above the competitors' prices so that the product is regarded as high quality).

In addition to making strategic decisions, it is also necessary to develop pricing tactics, that is, carry out market price adjustments. Tactical decisions include decisions regarding the establishment of:

standard or flexible prices;

uniform or discriminatory prices;

psychologically attractive prices;

price discount systems.

Pricing and pricing policy

Pricing is the process of setting prices for goods and services. There are two main pricing systems: market and centralized state. Market pricing operates on the basis of the interaction of supply and demand; government pricing is the formation of prices government agencies. In market conditions, pricing is a complex process influenced by many factors. In each case, the marketing service will have to choose the pricing policy of the enterprise.

The pricing policy of an enterprise is to set appropriate prices for goods and services and thus adjust them depending on the market situation by interrelating the prices of goods within the range, using special discounts and price changes, the ratio of the enterprise’s prices and the prices of competitors, methods of formation prices for new goods in order to capture its maximum possible share, achieve the planned amount of profit and successfully solve all strategic and tactical tasks.

When developing pricing policies, marketers should get answers to the following questions: what is the market model; what place does the price take among competitors in the market segments where the enterprise operates; what price calculation method should be adopted; what should be the pricing policy for new products; how the price should change depending on the life cycle of the product; what are the costs? Pricing policy has a long-term impact on the activities of the enterprise. Therefore, before developing it, it is necessary to analyze all external (independent of the enterprise) and internal (depending on the enterprise) factors influencing the development of a pricing strategy.

Main factors external environment factors influencing the price level are: government policy; political stability in the country, as well as in the countries where the company’s products are sold; resource provision; government regulation economics; perfection of tax legislation; general level inflation; nature of demand; presence and level of competition, etc.

The main factors of the internal environment of an enterprise that influence pricing include: product properties; quality and value of products for the buyer; the specificity of the products produced (the higher the degree of processing and more unique quality, the higher the price); method of production, procurement of raw materials and supplies (products of small-scale and individual production have a higher cost, mass-produced goods have relatively low costs and not so high a price); mobility production process; targeting market segments; life cycle goods; duration of the product distribution cycle from producer to consumer; differences between market segments or customer demand factors; competitors' reactions; service organization; image of the enterprise in the domestic and foreign markets; product promotion activities, marketing goals.

The pricing strategy is linked to the overall goals of the enterprise in the market. Such goals may be: increasing sales of goods; obtaining a given or maximum amount of profit; ensuring survival (winning a larger market share); gaining market leadership; maintaining the existing economic situation in the fight against competitors; formation of a certain image of a product, etc. An enterprise chooses each of its goals based on certain reasons or its financial situation.

The pricing policy of an enterprise can be formed on the basis of costs, demand and competition. When forming a cost-based pricing policy, prices are determined based on production costs, service costs, overhead costs and estimated profits. When forming a pricing policy based on demand, the price is determined after studying customer demand and setting prices acceptable for the target market. When forming a pricing policy based on competition, prices can be at market levels, below or above them. All three approaches require comprehensive solution a number of tasks determined by the choice of one or another pricing policy.

When forming a pricing policy, a marketer should answer the following basic questions: what price would the buyer be willing to pay for the company’s product; How does a change in price affect sales volume? what are the constituent cost components; what is the nature of competition in the segment; what is the minimum price level that ensures a break-even price for the enterprise; will delivery of goods to the buyer affect the increase in sales volume; what discount can be provided to customers, etc.

Before forming a pricing policy, it is necessary to determine the model of the market into which the enterprise intends to enter. There are several market models: pure competition market, pure monopoly market, monopolistic competition market, oligopolistic competition.

Characteristic features of the pure competition market model are the many sellers and buyers of any similar product. No buyer or seller has a significant influence on the level of market prices. There are usually no obstacles to entering such a market. The costs of developing a price policy are minimal, since the price level is determined by the relationship between supply and demand.

Pure monopoly market model. In this case, one enterprise is the only producer and seller, there is price control, and entry into such a market may be blocked. With this model, no special pricing mechanism is required.

Monopolistic competition market model. With this market model, there is a relatively large number of sellers and buyers, easy conditions for entering the market, and some control over prices within very narrow limits. Such a market requires marketing research and developing a specific pricing policy. In oligopolistic competition, a small number of enterprises enter the market and dominate the market. They prefer to negotiate prices, setting a convenient trading margin and dividing the market into zones of influence. This model requires a careful pricing mechanism.

The main stages of the pricing process are: setting pricing objectives; determining the level of demand; determination of costs; analysis of prices for competitors' products; selection of pricing methods; setting the final price. Pricing objectives are determined by the overall goals of the enterprise. The main objectives of pricing can be: survival in the market (ensuring sales); profit maximization; maximizing market share; gaining leadership in product quality; orientation to the existing market position.

If an enterprise operates in a highly competitive environment, when there are many manufacturers with similar products on the market, the main task is to ensure sales (survival). When choosing a pricing policy, marketers must study the pricing policies and prices of their competitors, and the quality of their products. If an enterprise's product is of lower quality than its competitor's, it cannot charge the same price as a competitor. Reduced prices, market penetration prices are usually used in cases where the price demand of buyers is flexible and elastic; if the enterprise wants to achieve maximum growth in sales volume and increase the total profit by slightly reducing the profit from each unit of goods; if the enterprise assumes that an increase in sales volume will reduce the relative costs of production and sales; if low prices reduce the level of competition; if available big market consumption, as well as in the desire to capture a larger market share.

The main objectives of an enterprise to maximize profits can be: establishing a stable income corresponding to the average profit for several years; calculation of price growth, and, consequently, profit due to the increase in the cost of capital investments; the desire to quickly obtain an initial profit if the enterprise is not confident in the favorable development of the business or lacks Money. When focusing on maximizing profits, the company must choose the appropriate price ( high level). Typically, in such cases, current performance is more important than long-term performance.

When fulfilling the task of maximizing market share, the enterprise must ensure an increase in sales volumes. This goal is set on the assumption that a large market share will have low costs and high long-term profit margins in the future. Here you need to know for what period of time you need to reduce prices and to what level.

When solving the problem of achieving market leadership in product quality, it is necessary to give the goods new properties, increase their durability, reliability, etc. To do this, it is necessary to carry out research and development work, which usually leads to high costs and high prices. Improving the quality of products allows you to outperform competitors, but in this case, high prices should be considered by buyers as quite acceptable.

If the goal of pricing is to focus on the existing market position, unfavorable moves by competitors should be avoided. So, if competitors have reduced the price in order to gain a larger market share, then the enterprise must also reduce it to the limits possible for itself. The opposite situation may also occur, when the price level increases.

The next step in the pricing process is to determine the level of demand. To determine how sensitive demand is to changes in price, a demand curve should be derived for each product, which allows one to establish the relationship between price, demand and supply and characterize the elasticity of demand. There is an inversely proportional relationship between price and demand, when an increase in price decreases demand or, conversely, a decrease in price leads to an increase in demand. This dependence is called elastic, flexible. But it may also happen that an increase in price will lead to an increase in demand. Typically, this situation occurs when buyers believe that high prices correspond to higher quality goods. At this stage, the main task of the marketer is to establish the relationship between price and demand (elastic or inelastic); setting a limit for increasing or decreasing the price at which demand increases; determining the quantitative relationship between price and demand and calculating the elasticity coefficient. Based on this stage, the maximum price of the product is determined.

Costs have a significant impact on the pricing policy of an enterprise. At the cost estimation stage, the minimum price that can be set for the product should be determined. The minimum price for a product is determined by the costs of production of the product, its distribution and sales channels, including the rate of profit. Costs can be fixed, variable or gross. Fixed costs are expenses that remain unchanged (salaries, rent, heat supply, interest payments, etc.). They are always present, regardless of the form of the enterprise and the level of production.

Variable costs change in direct proportion to the level of production. For example, when manufacturing mobile phones, an enterprise incurs costs for the purchase of special equipment, plastics, conductors, packaging, etc. Per unit of production, these costs usually remain unchanged. They are called variables because their total amount varies depending on the number of units of products. Gross costs are the sum of fixed and variable costs at each specific production level. For the goods, the company strives to receive an amount that would at least cover everything gross costs production.

Marginal cost- These are the additional or additional costs associated with the production of each additional unit of output compared to a given volume of output. Marginal costs make it possible to determine the unit of production on which the company should focus its attention: change the unit price of the product, reduce or increase production.

If costs are reduced, the company can reduce its price or increase its profit share. If costs increase, it is possible to shift their increase to the buyer by increasing prices, provided that there is demand for the product, or modify the product in order to reduce their costs and maintain the price level, or increase them, or remove the product from production as unprofitable. The price must cover the costs, otherwise there is no point in producing the product. This requires the establishment and analysis of factors affecting production costs and the cost of certain types of products.

When choosing distribution channels, in order to successfully cooperate with participants in distribution channels, you should take into account the need to cover costs and make a profit both at your own enterprise and with the intermediary: provide price guarantees, especially when introducing a new product to the market, provide sales promotion measures.

The next steps in the pricing process are to analyze the prices of competitors' products and select a pricing method. The prices set by competitors largely determine the pricing strategy of the enterprise, so they should be carefully analyzed. As a rule, buyers prefer a product whose price corresponds to the level of quality. To analyze competitors' prices, you can use both expert assessments of enterprise specialists and a survey of customers themselves. By comparing the quality indicators and prices of competitors with similar indicators of their own enterprise, marketers must draw certain conclusions about the price level.

Price adjustment occurs through changes in price lists, the use of markups, allowances, discounts, and compensations. Implementation of pricing policy, development of pricing strategy, and their practical implementation require highly qualified employees of marketing services, responsibility for decisions made and a creative approach.