Pricing is the process of value formation for a service or product, which is primarily characterized by the methods and methods of setting prices in relation to all goods. Depending on the chosen method, the development and achievement of the company's goals is determined. A comprehensive analysis of how various factors affect the price range of goods or services, as well as the choice of the method that forms the pricing, ensure profit growth.
Currently, the most common methods are:
1. Cost pricing is when actual costs (in other words, costs) for organizing the production of goods (services), sales and further support are taken as the starting point. This method is the most common.
2. Competitive pricing is the use of tactics and strategies for creating value for the most successful competitors.
3. Demand-oriented method. In this case, pricing is a comprehensive analysis and subsequent pricing taking into account the optimal price / cost ratio.
Now consider in more detail the problem of pricing. As described above, the costly method is the most common in most commercial structures. Both modern legislation and the economy are guided by it. Pricing is based on all costs. Prices are set for services that would ensure cost recovery and a stable level of profitability. The main advantage of this method is simplicity and a guaranteed level of income.
The pricing method, when the price of competitors for a similar product or service is taken as a starting point. Having learned the prices, the company decides at what level to keep the cost of production. This method makes it possible to get away from price competition. However, there are negative points. For different companies, the costs can be absolutely unequal. In other words, some may allow you to keep low prices and be profitable, while others, without reducing the cost, will sooner or later go bankrupt.
The demand-oriented pricing method is quite long and expensive. It is based on the perception of the value of a product or service. To apply this method, it is necessary to take into account that the perception of value in different people has differences.
This is due to taste, knowledge about the product or service, financial situation and so on. The following values of perception of value exist:
1. Value is low cost.
2. Value - the quality that I get for a certain price.
3. Value is the conformity to my requirements regarding a product or service.
4. Value is what I end up getting for a fee.
Based on the established prices, you can calculate the volume of sales using marketing research. Thus, it is possible to determine the price level that will allow the company to receive the desired profit and develop in the future.
