Pricing policy is individual. Pricing policy of the organization

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 should 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 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.

As a result of studying this chapter, the student should:

know

distinctive features pricing policy of trading enterprises;
main types of pricing strategies;
principles of their formation and main stages of development;

be able to

navigate the pricing policy of a trading enterprise;
types of pricing strategies and principles of their formation;

own

Information on the significance and impact of price policy on the economic situation of a trading enterprise.

Concept of price policy

Price policy- This general principles which the company intends to adhere to in setting prices for its goods or services.

The subject of the pricing policy of a trading enterprise is not the price of the product as a whole, but only one of its elements - trade markup, which characterizes the price of trade services offered to the buyer when it is sold to trading enterprises. Only this element of the price, taking into account the conditions of the consumer market, the conditions of its economic activity, the manufacturer’s price level and other factors, the trading enterprise forms independently. Despite the high degree of connection with the manufacturer’s price, the level of the trade markup is not always determined by the level of the price of the product. Thus, at a low price level for a product offered by its manufacturer, a high level of trade markup can be formed, and vice versa - when high level Manufacturer prices and trading enterprises are often limited to a low level of trade markup. This specificity trading activities determines the features of the formation of the pricing policy of a trading enterprise.

Under formation of the pricing policy of a trading enterprise understands the rationale for a system of differentiated levels of trade markups on goods sold and the development of measures to ensure their prompt adjustment depending on changes in the situation in the consumer market and business conditions.

Price policy should be focused on certain long-term and short-term goals, achieved through various tools and organizational solutions (Fig. 5.1).

Rice. 5.1.

The goals of pricing policy may be different. In the long term, they are one way or another expressed in maximizing profits and strengthening the market position of the enterprise. In the short term, i.e. as a specific goal that can be achieved in a given period using price, it can be any current problem related to meeting customer needs, attracting new customers, expanding sales markets or financial situation enterprises.

Traditionally, the following are the goals achieved by an enterprise through the use of pricing policies:

maximizing profitability of sales, i.e. the ratio of profit (as a percentage) to total sales revenue;
maximizing the return on net equity capital of the enterprise (i.e. the ratio of profit to total amount assets on the balance sheet minus all liabilities);
maximizing the profitability of all assets of the enterprise (i.e. the ratio of profit to the total amount of accounting assets formed at the expense of both own and borrowed money);
stabilization of prices, profitability and market position, i.e. the enterprise’s share in the total sales volume in a given product market (this goal may be of particular importance for enterprises operating in a market where any price fluctuations give rise to significant changes in sales volumes);
achieving the highest rates of sales growth.

However, this list is not exhaustive. Each company independently determines the most important directions, defining for itself long-term and short-term goals and objectives in relation to certain aspects of the company’s activities and the company’s existence in the market as a whole and its further development. Thus, to the number main goals The following can also be included:

continued existence of the enterprise can be considered as both a long-term and short-term goal. On the one hand, every enterprise is interested in long-term efficient work on the market, and pricing policy can help adapt to constantly changing market conditions, on the other hand, by changing prices, enterprises solve short-term problems, such as liquidation of inventories, the presence of excess production capacity, changes in consumer preferences and others;
short-term profit maximization – is actively used in the unstable conditions of a transition economy. Its implementation places emphasis on short-term profit expectations based on the forecast value of demand indicators and production costs, and does not take into account such important points as long-term prospects, the opposing policies of competitors, regulating the activities of the state;
short-term turnover maximization – can ensure maximum profit and market share in the long term. In the short term, intermediaries are set a percentage of commission on sales volume based on demand data, since often

it is difficult to determine the structure and level of production costs;

maximum magnification sales – "market offensive pricing policy." It is used on the assumption that increased sales will lead to lower unit costs and, consequently, increased profits. However, it is necessary to take into account that this policy can give the necessary result only if a number of conditions are met:
high sensitivity market to prices;
the possibility of reducing production and sales costs as a result of expanding production volumes;
competitors will not use a similar pricing policy;
"skimming" " Withmarket by setting high prices - "premium pricing". It is most effective for new products, when, even at higher prices, certain market segments achieve cost savings by better satisfying their needs. But it is necessary to monitor the achievement of the maximum possible turnover in each target segment and, if sales at a given price decrease, also reduce the price;
leadership in quality – such a reputation makes it possible to set high prices for goods, thereby covering the high costs associated with improving quality and R&D.

The goals of the pricing policy determine the choice of its strategy and operational-tactical tools. The starting point for developing a pricing strategy should always be the so-called triangle “company – client – competitor”.

Operational-tactical tools pricing is a large group of pricing policy tools that allows you to solve short-term strategic tasks, as well as quickly respond to unexpected changes various factors pricing or aggressive pricing policies of competitors.

Experts point out that significant reasons for using these tools include: three basic cases.

1. The company enters the market and makes the first decision about price and its role in the marketing mix (price as an element of the enterprise’s marketing mix).
2. The need for change, active actions to improve price efficiency in the system of elements of the marketing mix.
3. Rapid adaptation of pricing policy instruments to changes in internal and external pricing factors (increased costs, introduction of product and marketing innovations by competitors, changes in price perception among consumers, etc.).

Main operational-tactical instruments of pricing policy V modern conditions are called the following:

short-term changes in prices (or their elements);
price differentiation (for different consumers);
price variations (by time periods);
policy of price lines (borders, groups, price levels);
price organization and control (collection of price information, negotiations, price recommendations, guarantees, etc.).

The pricing policy should correlate with the general policy and be formed on the basis of the company's strategic goals. With that said scheme for forming the company's pricing policy can be represented as follows. First, information is collected and preliminary analysis external and internal factors, which represent the initial information for analyzing the current situation and future market prospects. Next is carried out strategic analysis collected information, on the basis of which the company’s pricing policy is formed (Fig. 5.2).

The pricing policy management process takes into account consistent stages construction pricing policy at the enterprise: setting objectives and developing pricing goals, searching for solutions and alternatives, coordinating and summarizing pricing information, making pricing decisions, their implementation and control. Thus, it employs specialists from various departments and levels of the company. Financial managers calculate the value of costs and determine the price level for goods that allows them to cover costs and bring the planned profit. Marketing and sales specialists conduct consumer research and determine how low prices can be to meet sales targets. Thus, pricing policy management process based on analysis of market information and financial indicators company and is to search alternative options achieving the goals and implementation of the company’s objectives and their financial justification. An effective pricing policy requires an optimal combination of internal financial constraints and external market conditions. The effectiveness of a company's pricing strategy should be assessed depending on whether the goals set for the company when choosing a pricing strategy have been achieved.

Rice. 5.2.

Not all trading enterprises can independently and independently set prices for goods, implementing their pricing policy in the consumer market. The basic pricing policy for a product in the consumer market is formed by its manufacturer, positioning its product in a certain way and choosing one or another marketing strategy. In this regard, when forming their pricing policy, trading enterprises are forced to largely focus on the pricing policy of the manufacturer.

Unlike production, trading enterprises in the vast majority of cases form their pricing policy not by individual goods, but by certain groups goods. Thus, at trading enterprises the pricing policy is not mono-product, but political character.

The pricing policy of trading enterprises is influenced by level of trade services. This is due to the fact that the price level at which goods are sold at trading enterprises is inseparable from the specific level of service offered to customers at these enterprises.

The price system at trading enterprises is, as a rule, more strictly standardized than at manufacturing enterprises. This is determined by the fact that the trading enterprise is guided by the average indicator of profitability of operations for all goods of all product groups. Thus, any change in the price of a particular product above the standard may lead to a change in the results of the enterprise.

IN retail trade not even the concept of “base price” is used, which is subject to negotiation during the sales process. And even the system of price discounts used by individual retail enterprises is standard in relation to individual price situations or categories of buyers. This complicates the flexibility of implementing pricing policies at trading enterprises.

Trade enterprises do not usually apply a number of pricing strategies of manufacturers associated with a long-term unfavorable situation in the market for a particular consumer product. As a rule, trading conditions allow trading company leave this quickly commodity market, i.e. stop purchasing and selling this product, while the manufacturer must actively fight for the return of funds invested in its production.

If a company asks itself the question: “What price should we set to cover costs and make a good profit?”, then this means that it does not have its own pricing policy and, accordingly, there can be no talk of any strategy for its implementation. . We can talk about price policy if the question is posed completely differently: " What costs do we need to have in order to earn a profit at the market prices that we can achieve??".

In the same way, it is inadmissible to say that a company has some kind of pricing policy or strategy if it asks itself a seemingly completely “market” question: “What price will the buyer be willing to pay for this product?” Formation of a pricing policy should begin with the question: “What value does this product provide to our customers and how can the company convince them that the price corresponds to this value?”

Finally, a pricing professional would not ask the question, “What prices will allow us to achieve our desired sales volumes or market share?” He will look at the problem differently: " What sales volume or market share would be most profitable for us??".

The greatest contradiction arises here between financial managers and marketing services of firms. However, conflicts between financiers and marketers over pricing policy usually arise in those firms where management has not made a clear choice between two alternative approaches to pricing: cost and value.

Pricing policy is to provide the services and goods offered with optimal economic characteristics that can adapt to the constantly changing market situation. This is the most important part marketing program, providing the company with the following advantages:

Stimulating sales by changing prices;

Support of other marketing methods of product promotion;

No additional financial investments.

Development stages

Pricing policy in marketing is a course of price formation that ensures the creation of a company’s business reputation, penetration into new segments, consolidation of positions, and maximization of profits. Its development involves several stages. The first is based on defining the goal. It may lie in the close prospects of the company entering new level or contain a broad direction of business development. The second stage includes internal marketing research. As part of this analysis, an assessment is made of the production capacity of the equipment, the costs of marketing activities that stimulate sales, the costs of searching for new sales channels and transporting goods, the cost of materials and raw materials, and labor costs. At the third stage, marketing research is carried out on competitors' strategies, in particular, flexibility and features of the choice of pricing policy, price variation depending on consumer preferences and market factors, and the cost of analogous goods. The fourth stage is determined by making a decision on the method for determining the retail value of your own goods. When choosing a pricing approach, the main criterion is to maximize profits. The fifth stage is the development of programs for adapting prices to systematically changing market conditions. Pricing policy at this stage consists of analyzing the factors influencing consumer demand, due to which the cost is adjusted. They can be supplemented by other conditions or combined with each other. The main difficulty of this stage is that most of them cannot be measured quantitatively.

Pricing policy in network marketing and demand factors

There are two prices in network marketing - distribution and client (sales). The distributor's retail profit is the difference between them, which is 20-30%. Products of a similar purpose in retail may have a higher or lower price. Pricing policy depends on many factors, but mostly on the following:

Dynamics of demand development;

Stage life cycle goods;

Income level of potential consumers;

Prestige of the brand of the product being promoted;

Availability of analogues on the market;

Functional characteristics of the product;

Tendencies towards a crisis, general state economics;

The need to attract additional labor and increase production capacity;

Increased costs for wages and production.

Conclusion

The company's pricing policy is to determine the final cost of goods or services, the correctness and adequacy of which is assessed by consumers. The buyer, when forming his opinion about the price, analyzes only the optimal relationship between monetary terms and consumer value. Before using a particular pricing policy, an assessment of the general level of cost in everyday dynamics is required. Such information can be obtained from catalogs of other enterprises, statistical directories and other sources.

Theoretical foundations of pricing policy

Price policy- This is the behavioral philosophy or general operating principles that a company intends to adhere to 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 provide a high-level solution to 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 used when a company does not expect that there will be a market for their product 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 applied at the initial and middle stages of the product life cycle, 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 unprofitable 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 “market offensive pricing policy.”

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

2. If costs are largely fixed and sunk, average costs are driven by declining capacity utilization, price competition may increase as firms attempt 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.

Main types 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.