What determines the pricing policy of an enterprise? Pricing strategy

The main goal of pricing policy in marketing- maximize profit for a given sales volume per unit of time. When developing a pricing policy, each enterprise independently determines for itself the tasks to be solved, which may be diametrically opposed, for example:

revenue maximization, when revenue is more important than profit. For example, for seasonal goods or goods with a limited shelf life;

price maximization, when the image of the product is more important than sales volumes. For example, to artificially limit demand due to the inability to satisfy it (demarketing);

maximizing sales volumes when market retention is more important than profit. For example, to retain or conquer a market;

increased competitiveness when sales volume is determined by price. For example, when selling goods with high elasticity of demand;

ensuring a given profitability, when maintaining profitability comes first. For example, in the production and sale of consumer goods.

Types of pricing policy

Cost-based pricing policy (setting prices by adding target profits to calculated production costs; setting prices with reimbursement of production costs). This is the easiest way to set your price.

Let's assume that the cost per unit of goods (production costs) is 100 rubles. The manufacturer intends to set a markup (planned profit) of 20% of the cost of the product. The final price of the product is calculated as follows:

This method is acceptable only if the price found with its help allows you to achieve the expected sales volume. This method, however, remains popular for a number of reasons.

First, this method does not require constant price adjustments in response to changes in demand.

Second, when all companies in an industry use this pricing method, prices are set at approximately the same level and price competition is minimized.

Policy high prices(price level policy; skimming policy). A pricing strategy that involves setting a high initial price for a new product to maximize profits from all market segments willing to pay the required price; provides less sales volume with more income per sale.

Companies entering the market with new products often set high prices for them in order to skim off profits layer by layer. The advantages of such a pricing policy include:

creating an image (image) of a quality product for the buyer as a result of a high initial price, which makes it easier to sell in the future when the price decreases;

ensuring enough big size profits at relatively high costs in the initial period of product release;

Facilitating changes in price levels, since buyers perceive price reductions more favorably than price increases.

The main disadvantages of this pricing policy are that its implementation is usually limited in time. A high price level encourages competitors to quickly create similar products or their substitutes. Therefore, an important task is to determine the moment when it is necessary to start lowering prices in order to suppress the activity of competitors, stay in the developed market and conquer its new segments.

Market penetration policy (P Breakthrough Politics; policy low prices). A pricing strategy that involves setting a relatively low price for a new product to attract the maximum number of buyers and gain a larger market share.

Not all companies start by setting high prices for new products; most turn to to market penetration. In order to quickly and deeply penetrate the market, i.e. quickly attract the maximum number of buyers and gain a large market share, they set a relatively low price for the new product. A company using such prices takes a certain risk, expecting that the growth in sales volume and income will cover the loss of profit due to a decrease in the price per unit of goods. This type of pricing policy is available for large firms with large production volumes.

To set low prices, the following conditions are necessary:

the market must be highly price sensitive, then a low price will lead to increased sales;

with an increase in sales volumes, production and sales costs should decrease;

the price must be so low that the company can avoid competition, otherwise the price advantage will be short-lived.

Market segmentation policy (differentiated pricing policy; differentiated pricing). A type of pricing in which a product is sold at several different prices without taking into account differences in costs.

Differential pricing takes several forms. Price differentiation by type of consumer means that different categories of consumers pay different prices for the same product or service depending on their financial situation. Losses or shortfalls in profit from selling goods at low prices to less wealthy buyers are compensated by selling them at high prices to buyers whose level of wealth allows this. Museums, for example, give discounts to students and pensioners.

At price differentiationby type of goods Different product variants are priced differently, but the difference is not based on differences in costs.

Price differentiation by location means that a company charges different prices for the same product in different regions, even if the costs of production and distribution in these regions do not differ. For example, theaters charge different prices for different seats based on the preferences of the public.

At price differentiationby time prices vary depending on the season, month, day of the week and even time of day. Prices for utility services provided to commercial organizations vary depending on the time of day, and on weekends they are lower than on weekdays. Phone companies offer reduced rates at night, and resorts offer seasonal discounts.

For differential pricing to be effective, certain conditions must exist:

the market must be segmentable, and the segments must differ in level of demand;

consumers of the segment that received a lower price should not be able to resell the product to consumers of other segments where the price is higher;

in the segment to which the company offers a product at a higher price, there should be no competitors who could sell the same product cheaper;

costs associated with segmenting the market and monitoring its condition should not exceed the additional profit received due to the difference in prices for goods in different segments;

Setting differential prices must be legal.

Psychological pricing policy (non-rounded price policy). One of the types of pricing that takes into account not only the economic component, but also the psychological impact of price; price is used as a source of information about the product.

Price is one way to communicate certain information about a product. Thus, many buyers judge the quality of a product primarily by its price. A bottle of perfume that costs 3,000 rubles may contain only 100 rubles worth of perfume, but there are many buyers who are willing to pay these 3,000 rubles, because such a price says a lot.

For example, according to one study examining the relationship between perceptions of price and quality, more expensive cars are perceived by consumers as being of higher quality.

Target rate of return policy is carried out in cases where the market does not offer a fundamentally new product, but some kind of mass product that has been produced for many years, but is modernized from time to time. Prices are set based on profit margins, which are determined based on production costs, prices, and sales volume per row. recent years, as well as taking into account the competitive positions occupied by the company in the market.

Follow-the-leader policy(price leader policy)

Using this approach in pricing new products does not at all imply setting prices for new products of your enterprise in strict accordance with the price level of the leading company on the market. The point here is only to take into account the price policy of the leader in the industry or market. The price of a new product may deviate from the price of the leading company, but only within certain limits. These limits are determined by the qualitative and technical superiority of your company’s products over the products of leading companies on the market. And the fewer differences in your company's new products compared to the majority of products offered in a particular market, the closer the price level for new products is to the “standards” set by the industry leader.

Theoretical foundations of pricing policy

Price policy is a behavioral philosophy or general principles activities that a firm intends to pursue in setting prices for its goods or services. In accordance with the basic principles of pricing policy, the company's pricing strategy is developed.

The company's pricing strategy is a long-term effort to set and change prices; This is the firm’s choice of possible long-term dynamics of changes in the base price of a product in market conditions. A pricing strategy can be developed for different markets, products, time of existence of a company in the market and other reasons. Pricing tactics are short-term and one-time events. These usually include all kinds of discounts and price increases. Tactical activities may run counter to the strategic guidelines of the company.

The essence of the entire pricing policy is revealed in the process of planning and implementing strategic and tactical actions. The pricing policy is not associated with such significant costs that are necessary for the implementation of product policy, distribution policy and product promotion. At the same time, it must be sufficiently justified, and its implementation must ensure high level solving such problems as setting prices for new goods, timely response to changes in prices from competitors, ensuring price flexibility, timely taking into account changes in the micro- and macroenvironment, in the field of promotion and distribution policy, product policy.

The price level is affected whole line various factors. These are production costs, the level of competition, the current economic situation, the political and legal environment, etc. Among all factors, the following are of paramount importance: costs, the ratio of supply and demand, the level of competition, the level of marketing implementation (the price level depends on the stage LCT), state pricing policy. The pricing process requires a comparison of the elements of pricing policy with the enterprise’s overall marketing view of its own activities and behavior external environment.

Types of pricing policy

Various pricing policies are used in the pricing process.

Policy of gaining market share consists in the fact that initially a product is introduced to the market at a relatively low price in order to stimulate demand; after conquering a certain market capacity, the company introduces a modified product to the market and begins to sell it at a higher price.

Policy for prompt receipt of sales proceeds is used when the company does not expect that the sales market for their product will exist for a long period of time, or has an urgent need for cash. Under such circumstances, the company seeks to set prices for its goods in such a way that selling them will generate revenue in the short term. High or low level prices depend on the following factors:

– stable demand and constant costs of production and sales give reason to expect that the company can quickly obtain the maximum revenue under given conditions when using high prices. This option can be used in the initial and middle stages life cycle of a product when there is an increase in sales;

– the presence of elastic demand and lower unit costs means that the firm can achieve the same result using low-price tactics. This option is used, as a rule, at the final stage of the product life cycle.

Thus, the choice of a particular pricing policy depends on the company’s goals and how it assesses the market situation.

The policy of covering costs and ensuring the required rate of profitability per unit of production lies in the fact that the price is formed based on the costs per unit of production and a reasonable rate of profitability necessary for the company to carry out its activities.

Market segmentation policy assumes that the company analyzes the market, divides it into segments and in each market segment, depending on the conditions, sets different prices for the same goods at the same production costs.

Follow-the-leader policy similar to market price tactics.

Psychological Pricing Policy built on a deep knowledge of buyer psychology.

Preferential price policy involves the use of preferential or incentive prices, which are integral part company's marketing strategies. Incentive prices, which are unprofitable for the company, are set at the level of retail prices for the end consumer. Such prices for goods are set in order to attract customers to the store in the expectation that they will also purchase other goods that are simultaneously offered at normal prices. By setting loss-making prices, as a rule, on the most popular food products (bread, butter, etc.), stores can significantly increase their turnover. But to do this, it is necessary to select products whose prices are easily remembered by customers, and maintain them at a set low level. Customers will repeat their purchases and eventually get used to going to that store. But selling goods at artificially low prices for too long can lead to the fact that in the minds of buyers these prices will be considered normal. This means that preferential pricing policies may not be suitable in the long term. Therefore, the store needs to gradually increase prices for these products until they reach the cost level.

Elastic (flexible) price policy is that a firm can sell its goods at one price once set. But a company can pursue a policy of elastic (flexible) prices depending on the market situation. Stable prices are characteristic of markets where goods are sold in bulk, while flexible prices prevail in markets where individual transactions are concluded. Flexible prices are used in the sale of industrial goods or services, as well as in markets for durable goods.

If the firm's products are homogeneous, then the firm is forced to reduce prices to the level set by competitors. If the company does not reduce the price, then most buyers will buy the product from the seller who turns out to be the leader in the market as long as the product is in stock. When a company raises the price of its product in a market for similar goods, other companies may or may not follow. This will depend on the type of market, on the number of sellers on it (the smaller the number of sellers of a product, the easier it is for firms to enter into price level agreements with each other, for example, a cartel agreement).

In markets for heterogeneous, differentiated products, a firm has greater flexibility in how to respond to price changes made by its competitors. The main point here is consumer preferences, since the buyer's attitude towards a given product depends on a number of factors, such as the quality and reliability of the product offered, the level of service, the level of after-sales service, its duration and availability, as well as personal considerations and attachments. These circumstances to some extent reduce the importance of the price itself for the buyer, which gives the company, which makes decisions on determining the price taking into account the actions of competitors, relative freedom. Instead of directly changing price, a company can think through a series of combined actions through other components of the marketing mix that help maintain a certain level of demand. In order to decide how to respond to a competitor’s price reduction, company management analyzes the reasons for the competitor’s price reduction (for example, the reduction occurred in order to capture a larger market share or in order to change the general level of prices in the market); price change over time (long-term or temporary change for the purpose, for example, of selling off excess inventory or stimulating the sale of goods in general); impact on market capacity; competitors' reaction.

Based on an assessment of the above factors, the company develops its own action plan aimed at compensating for the decline in prices on the market.

Pricing policy options when prices change.

Price in conditions market economy- one of the most important factors determining the profitability of an enterprise. Therefore, the pricing policy must be well thought out and justified. Pricing policy is common goals that the enterprise intends to achieve with the help of prices for its products, and a system of measures aimed at this. To correctly formulate a pricing policy, a company must clearly understand the goals it will achieve through the sale of a specific product. When choosing a pricing policy, it should also be taken into account that although the global goal of any enterprise is to make a profit, intermediate goals can be put forward such as protecting one’s interests, suppressing competitors, conquering new markets, entering the market with a new product, and quickly recovering costs. , income stabilization. Moreover, achieving these goals is possible in the short, medium and long term.

The main goals of the pricing policy are as follows:

1. Further existence of the enterprise. The enterprise may have excess capacity, there are many manufacturers in the market, there is intense competition, demand and consumer preferences have changed. In such cases, in order to continue production and liquidate inventories, enterprises often reduce prices. In this case, profit loses its meaning. As long as the price covers at least variable and part of the fixed costs, production can continue. However, the issue of enterprise survival can be seen as a short-term goal.

2. Short-term profit maximization. Many enterprises want to set a price for their product that would ensure maximum profit. In achieving this goal, the emphasis is placed on short-term profit expectations and does not take into account long-term prospects, as well as the countervailing policies of competitors and the regulatory activities of the state. This goal is often used by enterprises in unstable conditions of transition economies.

3. Short-term maximization of turnover. A price that stimulates maximization of turnover is chosen when the product is produced corporately and in this case it is difficult to determine the structure and level of production costs. In order to achieve the set goal (maximizing turnover), a percentage of commission on sales volume is set for intermediaries. Maximizing turnover in the short term can also maximize profits and market share in the long term.

4. Maximum increase in sales. Enterprises that pursue this goal believe that increased sales will lead to lower unit costs and, on this basis, to increased profits. Such enterprises set prices as low as possible. This approach is called " pricing policy market offensive."

5. Skimming the market by setting high prices. This policy occurs when an enterprise sets the highest possible price for its new products, significantly higher than the production price. This is the so-called “premium pricing.” As soon as sales at a given price decline, it is necessary to reduce the price in order to attract the next layer of customers, thereby achieving the maximum possible turnover in each segment of the target market.

6. Leadership in quality. An enterprise that manages to secure its reputation as a leader in quality sets a high price for its product in order to cover the high costs associated with improving quality and the costs of research and development carried out for these purposes. The listed goals of pricing policy can be implemented in different time, at different prices, there may be different ratios between them, but they all collectively serve a common goal - long-term profit maximization.

Product life cycle pricing policy

The best known and most criticized concept is the product life cycle concept. It proceeds from the fact that each product is on the market for a limited time due to obsolescence and is directly related to pricing, since it allows us to study the behavior of prices at various stages of the product’s life cycle, and thereby develop a pricing policy for each phase of the cycle. Each product goes through the following stages: development and entry into the market, growth, maturity, decline and disappearance from the market, that is, it lives its own life cycle, which has a different total duration, the duration of individual stages within the cycle, and the features of the development of the cycle itself.

There is rarely a single price set for each stage of a product's life cycle; at each stage, new consumer segments with different price sensitivities appear in the market, which is taken into account in pricing practices.

Stage of product development and entry into the market

The main characteristics of the development and market entry stage: significant research, development and production costs, the absence of actual competitors, price is an indicator of the quality of the product. Price at this stage, on the one hand, does not play a noticeable role. However, if for consumers price is an indicator of a certain quality, and at this stage of the product's existence they cannot yet compare it with alternative products, then their behavior is relatively insensitive to the price of the innovative product. Therefore, manufacturers must provide broad information about the benefits that consumers will receive from using a new product. In turn, information about the quality of a product is most often disseminated through potential buyers, so future long-term demand for a product depends on the number of initial buyers. According to experts, demand begins to adapt to a new product if the first 2-5% of consumers have adapted to it. On the other hand, the price at this stage should first of all compensate for the initial costs of research and development of new production. Therefore, it is usually high.

"Growth" Stage During the "growth" stage, the product encounters its competitors for the first time, thereby creating greater choice for the consumer. At the same time, consumer awareness increases, which increases his sensitivity to the price of the product. The price at this stage is high, but lower than in the previous phase. The price must exactly correspond to the quality of consumer value that the buyer expects. Entering the mass market depends on the state of the industry, internal capabilities, external environment, goals and directions of future development of the company. In any case, two market elements will always limit a producer's options: competitors and consumers. At the “growth” stage, the following goals of pricing policy can be achieved: - “cream skimming”, or rewards, when the price is set above the price of competitors, emphasizing the exceptional quality of the product; - establishing a “parity” price. This is a situation when there is an overt or secret conspiracy with competitors or when there is a focus on the leader in setting prices. In this case, the focus is on the most typical mass buyer, that is, the company works with the entire market.

Stage of “maturity” of the product A feature of the stage of “maturity” is the appearance on the market of the most price-sensitive group of consumers.

In general, the market situation is as follows:

1) the market is saturated with the product;

2) competition weakens due to the elimination of firms that cannot withstand it (primarily those with high production costs);

3) some firms are moving to create a new product. The price level at the maturity stage is low.

At this stage, its market share is important for the company, since its decrease, even with low costs and the inability to increase the price, leads to an inability to recoup expenses. Often, the “saturation” stage is distinguished as a separate stage of the life cycle. but it can also be considered as the final phase of maturity. During this period, the market is saturated, demand requires new products. To prevent competitors from seizing the initiative, it is necessary to create new products. At this stage, the market expands, firstly, due to previously unreached potential consumers; secondly, due to the geographical expansion of the market. It is at this stage that a certain general “market” price appears, to which manufacturers gravitate to a greater or lesser extent; firms have lower costs for promoting goods due to existing connections. There is good competition among consumers.

Decline stage At this stage, the product ends its existence in conditions of underutilized production capacity. The price is either lower than before, or increases if a “lagging” buyer joins in. The impact of this situation on prices depends on the ability of the industry or individual firm to get rid of excess capacity for the production of a given product and switch to a new product. Profits and prices may fall sharply, but they may also stabilize at low levels.

In any case, production will be inefficient for any firm. The following must also be taken into account:

1. If most costs are variable costs or funds can be reallocated to more profitable sectors (for example, by reducing the number of employees), prices should decrease slightly, which will give impetus to the reduction of production capacity in other firms.

2. If costs are largely fixed and sunk, with average costs dependent on declining capacity utilization, price competition may increase as firms try to increase capacity utilization and capture a larger share of a declining market.

3. Basic pricing strategies An enterprise's pricing policy is the basis for developing its pricing strategy.

Pricing strategies are part of the overall development strategy of the enterprise. A pricing strategy is a set of rules and practices that are advisable to adhere to when setting market prices for specific types of products manufactured by an enterprise.

The main types of pricing strategies are;

1. High price strategy

The goal of this strategy is to obtain excess profits by “skimming the cream” from those buyers for whom the new product is of great value, and they are willing to pay more than the normal market price for the purchased product. The high price strategy is used when the company is convinced that there is a circle of buyers who will demand an expensive product. This applies: - firstly, to new goods appearing on the market for the first time, protected by a patent and having no analogues, i.e. to goods that are at the initial stage of the “life cycle”; - secondly, to goods aimed at wealthy buyers who are interested in the quality, uniqueness of the product, i.e., to a market segment where demand does not depend on price dynamics: - thirdly, to new goods for which the company has there is no prospect of long-term mass sales, including due to the lack of necessary capacities. Pricing policy during the period of high prices is maximizing profits until the market for new goods becomes the object of competition. The high price strategy is also used by the company for the purpose of testing its product, its price, and gradually approaching an acceptable price level.

2. Average price strategy (neutral pricing) Applicable in all phases of the life cycle, except decline, and is most typical for most enterprises that consider making a profit as a long-term policy. Many enterprises consider this strategy to be the most fair, since it eliminates “price wars”, does not lead to the emergence of new competitors, does not allow firms to profit at the expense of customers, and makes it possible to receive a fair return on invested capital. Foreign large and super-large corporations in most cases are content with a profit of 8-10% of share capital.

3. Low price strategy (price breakthrough strategy) The strategy can be applied at any phase of the life cycle. Particularly effective when price elasticity of demand is high.

Applicable in the following cases:

a) in order to penetrate the market, increase the market share of their product (policy of exclusion, policy of exclusion);

b) for the purpose of recharging production capacity;

c) to avoid bankruptcy. The low-price strategy aims to achieve long-term, rather than quick, profits.

4. Target price strategy With this strategy, prices, sales volumes, and the amount of profit should remain constant, no matter how much they change, that is, profit is the target value. Mainly used by large corporations.

5. Preferential pricing strategy Its goal is to increase sales. It is applied at the end of the product life cycle and manifests itself in the application of various discounts.

6. “Bound” pricing strategy When using this strategy, when setting prices, they are guided by the so-called consumption price, equal to the sum of the price of the product and the costs of its operation.

7. Strategy of “following the leader” The essence of this strategy does not imply setting prices for new products in strict accordance with the price level of the leading company on the market. We are only talking about taking into account the pricing policy of the leader in the industry or market. The price of a new product may deviate from the price of the leading company, but within specified limits, which are determined by quality and technical superiority.

The following strategies are less commonly used:

a) constant prices. The enterprise strives to establish and maintain constant prices over a long period, and since production costs increase or may increase, instead of revising prices, enterprises reduce the size of the packaging and change the composition of the product. For example, you can reduce the weight of a loaf of bread that costs 10 rubles, while leaving the price unchanged. The consumer prefers such changes to price increases;

b) unrounded prices, or psychological prices. These are, as a rule, reduced prices versus some round sum. For example, not 10 thousand rubles, but 9995; 9998. Consumers get the impression that the company carefully analyzes its prices and sets them at a minimum level. They like to receive change;

c) price lines. This strategy reflects a price range, where each price indicates a certain level of quality for the same product. In this case, two decisions are made: the range of supply prices is determined - the upper and lower limits - and specific prices are set within this range. The range can be defined as low, medium and high.

Even less commonly used are pricing strategies such as:

Sales assistance;

Differentiated prices;

Restrictive (discriminatory) prices;

Falling leader;

Bulk purchase prices;

Unstable, changing prices.

Pricing policy is a set of rules, principles and methods in accordance with which an enterprise determines the cost of its products or services.

Definition of the concept

Pricing policy consists of two main components, namely strategy and tactics regarding pricing. Speaking about the first element, it is worth noting that it implies long-term positioning of the product in market conditions. Here it is important to decide on the price segment, as well as choose the methodology that will be used to determine the cost. Pricing tactics involve developing short-term measures that will ensure effective sales at this specific period of time.

Pricing policy must be constantly adjusted depending on changes in the market situation. This is not just a method of making a profit, but also a fairly strong argument in the process of competition. The price must be set in such a way that it simultaneously satisfies the consumer and provides a decent level of profit to the entrepreneur.

Formation of pricing policy

The final cost of a product is influenced by many factors that lie in both the external and internal environment of the enterprise. The essence of the pricing policy consists of the following points:

• Since the product is produced for the customer, it is important to determine the maximum sum of money what he is willing to pay for a particular product;
• it is necessary to trace the trend of changes in sales volumes depending on price fluctuations;
• determination of all costs that arise in the production and sales process;
• determining the degree of competition in the market, as well as the pricing policy of the main rivals;
• you should calculate the minimum price of the product, ensuring zero profit, below which you cannot fall;
• calculation of the maximum possible discount percentage that will not have a significant impact on financial position enterprises;
• compiling a list of additional services that can increase the value of the product in the eyes of the buyer and will also help increase sales volumes.

Goals of pricing policy

The objectives of the pricing policy can be formulated as follows:

• ensure the profitable operation of the enterprise (or at least a zero break-even level in case of sales failure);
• get the maximum level of profit that can be achieved at the moment;
• developing new markets or obtaining leadership positions in a priority segment;
• “skimming” during the period when the buyer is ready to purchase a popular or unique product even at an inflated price;
• an increase in the indicator characterizing sales volumes (constant or one-time).

Pricing policy analysis

Enough complex concept is the pricing policy. An analysis of its effectiveness at an enterprise should consist of the following points:

• Based on the situation within the organization, as well as as a result of studying the external situation on the market, the interval in which the optimal price of the product will be located must be determined;
• studying the reaction of buyers to changes in the cost of certain products;
• establishing the relationship between quality, as well as production features and price of the product;
• identifying factors that may affect changes in the cost of a product, both upward and downward;
• flexibility of demand for goods due to price fluctuations;
• calculation of the amount of possible discounts, as well as their impact on the final result of the production enterprise;
• After setting the final price, it is worth determining how well it meets your goals.

Pricing approaches

The pricing policy of an enterprise can be developed on the basis of one of two approaches: cost or value. As the name of the first implies, it is based on production and sales costs. To begin with, the costs of manufacturing products are calculated. At the next stage, it is worth assessing what the cost of advertising events will be, as well as transporting the goods to the intermediate and final consumers. It is definitely worth studying the market situation, as well as the pricing policies of competitors. Once all the previous factors have been taken into account, the final figure can be adjusted based on how much value the product provides to the buyer.

The value approach does not imply measures to maximize sales. The final cost of the goods is determined according to the opposite scheme. To begin with, marketers study consumer behavior, as well as the value that a particular product represents to them. Next, it’s worth assessing the general situation on the market, and also determining maximum amount which the consumer is willing to pay. If the established price completely covers production costs, then you can begin to sell, but otherwise, the final figure will have to be increased proportionally.

Pricing strategies

The pricing policy of an enterprise can be formed based on one of the following strategies:

• The price leader strategy is typical for those manufacturers who have won leading positions in the market. Moreover, they can either overestimate or underestimate the cost of goods, which will force all other players to adapt to this situation. Usually this famous brands, for whose products customers are willing to overpay.
• The response policy is typical for relatively small enterprises that are not popular in the market. They are forced to set low prices in order to attract buyers to their products. An aggressive strategy is used by those manufacturers who seek to expand market share and become industry leaders.
• The skimming strategy is used when new products or their latest modifications enter the market. It is worth noting that a number of buyers (innovators) are willing to pay even inflated prices for such products, which is what manufacturers are guided by.
• A strategy aimed at conquering the market implies setting the lowest possible price for a particular product that will attract consumers. Then the selling price begins to increase, gradually approaching the market value.

Pricing policy management

Pricing policy management includes a number of mandatory tasks:

• assessment of costs and expenses that arise in the process of production and sales of products;
• determining the economic and marketing goals that the organization sets for itself;
• identification of competing firms, as well as analysis of their pricing strategy;
• analysis financial condition enterprises;
• market analysis in order to determine priority segments, as well as acceptable prices for the buyer;
• analysis of the competitive environment;
• developing your own strategy or adjusting it in accordance with the data received.

Mistakes when developing a pricing policy

Pricing policy is one of key points in the work of the enterprise, and therefore one should be extremely careful when drafting it. Sometimes management and marketers make some mistakes that can negatively affect the financial results of the organization. So, you need to work closely enough with the production department so as not to miss a single cost item that arises during the manufacture of the product. Otherwise, the operation of the enterprise risks being ineffective.

Before launching a product for sale, you need to conduct thorough marketing research to determine what value it has for the consumer. If you neglect this event, there is a risk of setting an unreasonably low price. Thus, we can talk about lost profits, which could contribute to further expansion of production.

Don't underestimate competitors and their pricing policies. It is important to analyze several scenarios that determine how your opponents will react to your actions. Otherwise, your pricing policy may be ineffective and lose the competition.

Price categories

An organization's pricing policy largely depends on how the company positions itself and its product on the market. In this regard, a number of categories can be distinguished:

• The highest price category implies that each unit of production has the maximum level of profitability. Also, due to the cost, the image of the product increases, indicating its prestige and high quality. This policy is typical either for well-known brands or for manufacturers who are the first to enter the market with a fundamentally new product.
• The average pricing policy is followed by those enterprises that do not strive for leadership or super-profits, but are focused on the mass consumer.
• The lowest price category is caused, as a rule, by the low quality of products, as well as the lack of additional funds for marketing events. Also, such a step can be resorted to by those companies that, at the expense of the lowest possible cost, strive to conquer the market in the shortest possible time.

Types of prices

Marketers distinguish two main types of prices for goods and services:

• The base price is the minimum amount at which a manufacturer will agree to make and sell its goods. it makes it possible to fully cover the costs of manufacturing products, as well as ensure a minimum profit (or a zero break-even level).
• A fair price is determined by the value of a product in the eyes of buyers. It makes no sense to set a higher sales price, because the client will simply refuse to overpay. If the manufacturer wants to make the price more significant, then care must be taken to give the product specific characteristics that distinguish it from other similar products.

Discount Policy

A fairly serious marketing tool is a flexible pricing policy. It involves the installation of a system of discounts, which imply a certain reduction in the selling price of goods. This tool is used to attract buyers, conquer a certain market segment, or maximize sales of goods in a specific period of time. Often such price reductions are quite short-term.

By setting a discount, the manufacturer does not work to its detriment, because before that the price is slightly inflated. So, speaking about seasonal sales, it is worth saying that they are fully compensated by the profit received at the beginning of the sales period. When setting the size of markups and discounts, an entrepreneur should be guided not only own interests(base price), but also the interests of the buyer, which are expressed in a fair price. Otherwise, these activities will not be successful.

Price competition

Price is one of the most common and effective competitive tools. This process can be carried out in two directions:

• Underpricing is quite often used in the market where consumer goods are sold. Most often, large firms with large production volumes resort to this, and, accordingly, with minimal costs per unit of production. In this case, it is quite difficult for competitors to enter the market or gain high positions.
• Inflating the price is aimed at increasing the perception of the prestige and quality of the product in the eyes of buyers. This is especially abused by well-promoted brands, taking advantage of the promiscuity of consumers.

Price discrimination

The pricing policy of an enterprise can be aimed at covering as large a share of the market as possible, attracting completely different categories of buyers. However, each of them pays a different price. This phenomenon in economics is called price discrimination. An example would be a discount program used by many well-known brands or retail chains.

The essence of pricing policy is to provide the offered goods and services with the most optimal economic characteristics, which are able to adapt to the constantly changing market situation. Pricing policy is the most important part marketing program and provides the company with the following advantages:

1. Does not require additional.
2. Allows you to support other marketing methods for promoting products.
3. Stimulates sales by changing prices.

Stages of developing a pricing policy

1. At the first stage, you should decide on the purpose of the pricing policy. This goal may contain an extensive area of ​​business development or small prospects for the enterprise to enter the new level sales
2. The second stage is characterized by internal marketing research. As part of this analysis, an assessment is made of the production capacity of the equipment, labor costs, the cost of raw materials and supplies, the costs of transporting goods and the search for new distribution channels, the costs of marketing activities that stimulate sales, etc.
3. At the third stage, marketing research is carried out on the pricing strategies of competitors, namely, price levels for analogue products, price variations depending on changes in market factors and consumer preferences, flexibility of pricing policies and features of the choice of pricing strategies.
4. The fourth stage is determined by the method by which the retail price of own goods will be determined. The main criterion when choosing a pricing approach is to obtain the maximum possible profit.
5. At the fifth stage, programs are developed to adapt prices to constantly changing market conditions. At this stage, factors influencing consumer demand are analyzed, as a result of which the price needs to be adjusted. These factors include:
   • rising production costs and wages;
   • the need to increase production capacity and attract additional labor;
   • general state economy, trends towards crisis;
   • product quality level;
   • a set of functional characteristics of a product;
   • availability of analogues on the market;
   • the prestige of the brand under which the product is promoted;
   • income level of potential consumers;
   • product life cycle stage;
   • dynamics of demand development;
   • type of market.
6. These factors can be combined with each other and supplemented by other conditions. The main difficulty of this stage is that most of these factors cannot be measured quantitatively.
7. The sixth stage is the final one, as it completes the price formation process with the final monetary expression of the value of the product.

• penetration into a specific market segment;
• consolidation of existing positions;
• maintaining demand;
• extending the product life cycle;
• obtaining the maximum possible profit;
• Creation competitive advantages;
• development of intended market niches;
• formation of consumer demand;
• return on production costs;
• sales promotion, etc.

Types of Pricing Strategies

1. “Skimming” strategy.
   This strategy is applicable mainly to a new product that has no analogues on the market. This product creates a unique need, which can only be satisfied by its unique properties and features. The retail price for such goods is set significantly higher than the cost price with the expectation of obtaining maximum profit at the first stage of the product life cycle. Later, the price gradually decreases, allowing each category of buyers to purchase a new product, paying for it as much as their financial capabilities allow. The successful implementation of the proposed strategy depends on the level of demand and consumer awareness of the benefits that he will receive after purchasing the product.
2. Market penetration strategy.
   This strategy is mainly used by firms that have recently entered the market. The essence of the strategy is to set the lowest possible prices for goods of own production. This approach often leads to some losses and leaves the company without profit. The main goal of this strategy is to attract the attention of consumers to the products of this organization and acquire loyal customers.
3. Differentiated pricing strategy.
   This strategy involves developing heterogeneous prices for different settlements and places of sale of goods. This approach may be due to different amounts of costs that the company incurs when delivering goods to one point or another. Prices developed within the framework of this strategy are proposed to be used in combination with incentive discounts and promotions.
4. Preferential pricing strategy.
   This strategy offers the same product different categories consumers at heterogeneous prices. With this approach, one should take into account the level of income and the degree of importance of a group of representatives of a particular target audience for the enterprise.
5. Psychological strategy.
   This strategy implies that the price of the product is not rounded to a whole value, but leaves a few kopecks after the decimal point. This approach allows the consumer to expect change, and also to think that this price was the result of careful calculations.
6. Wholesale pricing strategy.
   This strategy involves reducing prices to encourage one-time purchases of large quantities of goods.
7. Elastic price strategy.
   This strategy takes into account only the purchasing financial capabilities and characteristics of consumer preferences, on the basis of which the price is formed.
8. Prestige pricing strategy.
   This strategy involves setting high prices for goods that have a special level of quality.

An example of pricing strategy formation

1. Determining the goals of the pricing policy.
   Taking into account the fact that the demand for service maintenance of software products is growing, and the labor and time resources at company “A” are not enough to satisfy the entire volume of consumer needs, the goal of the pricing policy will be formulated as follows: finding the optimal price for a comprehensive service agreement , ensuring the planned rate of profit and restraining rush demand.
2. Marketing research of internal production capabilities.
   The results of the analysis are presented in Table 1.
   

   Table 1

   Analysis of the production capacity of company "A"

   № p/p	Indicator name	Unit	Quantitative expression
   1.	Labor costs	rub.	100000
   2.	Number of technical support specialists	people	5
   3.	Average time spent per client (including round trip travel)	hour.	2
   4.	Utilities and communication services	rub.	5000
   5.	Settlements with suppliers	rub.	20000
   6.	Business expenses	rub.	10000
   7.	other expenses	rub.	15000

   The monetary data given in Table 1 together constitute the minimum amount that Firm A must receive each month to cover the costs of running the company.
3. Marketing research of competitors' pricing strategies.
   The results of the analysis are shown in Table 2
   

   table 2

   Analysis of competitors' pricing strategies The data provided reflects the prices for technical support contracts that competitors enter into with their consumers.
4. Deciding on the pricing method for your own service contracts and calculating the final price.
   Taking into account the above factors, the price for work under a service contract will be formed on the principle of focusing on greater profits.
   Firm A has 80 regular customers. The average price for a service contract is 3,000 rubles. This approach to pricing brings company “A” monthly about 240,000 rubles in revenue. This amount covers costs and leaves a share of profits for business development. But technical support specialists do not have time to satisfy the needs of all clients on time, which is why conflicts periodically arise between company “A” and its consumers.
   To solve this problem, it was decided to increase the price of service contracts by 40% without changing the range of services provided to clients. Now average price for a service contract is 4,200 rubles. As a result of this action, 15 clients refused to cooperate with company “A”. Now monthly average amount revenue is 273,000 rubles, which exceeds the previous figure by 33,000 rubles. Thus, company “A” received most of the profit by reducing the time spent on servicing clients who are not ready to pay the established cost of service contracts.