Management company prices
In the marketing of the company for the calculation of prices by any method - is only the first step to solving one of the major problems: the definition of a level of prices which did have products available to consumers commercially viable for enterprise and competitive. Further regulate the price of goods on the basis of changes taking place in the surrounding business environment. Thus, control prices - a process adjustments based on the strategy and tactics of the company, as well as actions of, forces and conditions of the business environment.
In the management of prices can be used such strategy or policy.
The policy of gradual decline in prices. It is characterized by relatively high prices at the time to market for new products. Further, according to the concept of product life cycle, their levels are gradually reduced.
There are several prerequisites for using such pricing policies:
- First, the presence of a sufficiently large number of potential buyers with high purchasing power, awareness of this product and the acute need for it;
- Secondly, a small amount of direct production costs of products, making it possible to profit when even small amounts of initial sale;
- Thirdly, product differentiation from other product offerings in the market that prevents the quick response of competitors;
- Fourth, high product quality, the popularity of its brand.
The main advantage of such a policy stems from the simple truth that the price is always easier to reduce than increase. With this policy long products retain their market appeal and high sales volume.
The main problem here is to establish the right entry-level price, which would give the possibility of gradual reduction while preserving the commercial interests of the company. Because of this, the most difficult in the implementation of this policy is just the first step.
The policy of "removal cream." This policy is used on goods that belong to the category of fashion innovations that have a small length of the life cycle. It is characterized by the highest possible price while bringing to market a new product and the time of its existence on the market as a good-news. The prerequisites for the use of these policies is high, almost high demand for such a product, a slight elasticity of demand, availability of appropriate price segment of consumers, buyers ignorance of real production costs to manufacture this product, as well as quick reaction unlikely rivals.
The advantages of such a policy is the ability to quickly cover the costs of production and marketing, obtaining appropriate revenue, increasing company image as an innovator and regulating undesirable high demand. However, high prices are too attractive for competitors, which could force the company to withdraw eventually from further work with this product that artificially reduce its life cycle.
Policy penetration. It is now used to display their products to new markets, creating demand where appropriate. Such a policy inherent low initial price that the growth in demand, popular products of their respective adaptation to new markets can also gradually rise. By this policy succeed when the market, mastered now, there is a fairly high level of competition and when it can be divided into segments, isolating those where the elasticity of demand is high and consumers do not perceive low price as an indicator of low quality products.
The main premise of the use of such policies is the presence of enough large market, the required number of products that makes it possible to achieve large volumes of turnover, and due to this break-even point now passing, receiving the profits.
The advantage here is the availability of real opportunities for market penetration by providing consumers specific price benefits, creating a competitive company priority. However, this policy there are drawbacks - losses that occur in the implementation of the product on the market, and the risk did not pass the break-even point.
The policy of differentiation in prices. It is selling the same product to different customers, or at different times (including overnight), or in different areas at different prices. This policy performs two tasks:
- First, to adapt to the conditions of an enterprise various markets (segments) where there are different competitive conditions, the intensity of demand, consumer incomes, their perception of a price level;
- Secondly, to achieve industrial-economic, marketing or logistics advantages in terms of impact on consumer behavior.
There are several types of price differentiation:
- Spatial (different prices at home and abroad, or in different parts of the country);
- Temporal (different prices for the season or outside, day or night);
- Depending on the usage of the product (the product is used as a fuel or as a raw material);
- For groups of consumers (eg, reduced rates for veterans, students, etc.); '
- Depending on the size of the consignment, the customer purchased (more Party, the lower the price).
The main prerequisite for the use of such policies is the availability of sufficiently differentiated by consumer perception of price segments of the market, the ability to reach enterprise and economic feasibility of this. The main advantage here is the good prospects for large volumes of turnover, attracting a sufficient number of consumers.
However, in different countries to this policy are ambiguous. Sometimes it qualify as price discrimination, which is punishable by law. In any case, the seller must prove that the difference in prices for the same product caused a corresponding difference in the cost of production or marketing.
Policy prestigious prices. This policy means now hold enough high prices for their products. The main prerequisite of this policy is the high reputation of the company is extremely high quality and uniqueness of its products, general acceptance of its brand. The high price for certain segments of the market is an element of prestige confirmation consumers.
The main drawback of this policy is the dependence on negative environmental changes. But any out there that to maintain the prestige of the prices are not reduced because it would shift the company and its products in a lower category and return back, as already noted, is almost impossible.
Policy psychologically comfortable prices. This policy takes into account the consumer perception of a level of prices for goods based on their "internal logic". Yes customary to consider: the price should not denote a "round" numbers (eg, in the US believe that the price of 1.90 USD or 12.99 alleged buyers perceive better than 2.0 or 13.0 dollars, though the real the difference is insignificant). In certain cases recommended to specify the price per 100 grams of product, not the 1 kg.
The policy of "alignment" of prices. It is used in case of sale of a large range of products within the same category (product line). Under this policy rates "line up" so that the price range was quite differentiated. For example, price range 5, 8, 12, 16 is more rational than 5, 6, 7, 8 and so on.
Promote policies consistent segments. This policy is used as a saturation segment (usually prestigious) this commodity. Price reduction is accompanied by another product offerings, less prestigious segment (another group of consumers). Change purpose products and price levels require mandatory policy changes relevant distribution.
The policy of "loss leader." It is the policy of prices of goods used by consumers in the kit. Here the main piece kit can be sold even at unprofitable prices. This loss is covered by the much higher prices of complementary parts or spare parts.
The policy of flexible prices. It provides quick reaction on changing the balance of demand and offerings in the market. The corresponding price changes can occur even during the day.
The policy of price stability. It is usually used for the goods of mass demand, when prices have remained stable for a long time despite any tactical variations.
Politics market price advantage. It is used by companies that have an advantage in the market and can provide a reduction in their cost of production and marketing, increasing revenues from sales of goods due to large sales. Under this policy the goods are sold at a price slightly lower than in competing enterprises.
Policy commodity prices, out of production. You first need to decide which category includes those goods. If the goods are completely lost its market appeal, then use the sales price that is low enough.
If it received the status of good-retro (like spare parts for cars of previous years), that has become quite attractive to certain categories of consumers, it is oriented to this specific niche market and sell at very high prices.
Known as pricing survival. Here the main goal of the company is to stay in business and keep their customers wait for positive environmental changes. The main feature of this policy - selling goods at low prices even unprofitable.