In conditions of market competition, companies are literally forced to fight for their customers. The market value of a product is one of the instruments of this struggle; it is the most probable price at which the product will be sold on the market. The success of the trading activity of the enterprise and, accordingly, its profit depends on a reasonable calculation of this value.
Instructions
Step 1
There are two parties involved in establishing the market value: the buyer and the seller. A company that sells a product on the market tries to establish a cost that could cover all the costs of purchasing raw materials and manufacturing products, selling them, and, in addition, bring a net profit. Thus, the market value of the goods for the seller cannot be lower than its cost, otherwise the company will operate at a loss.
Step 2
The buyer, of course, also takes part in the formation of the market value, since it is he who makes the demand for a particular product. Nevertheless, the ratio of supply and demand in this case is one of the decisive factors. The consumer of the product has an idea of the current market prices for a similar product from other manufacturers, and makes a purchase decision based on his own financial capabilities, needs and, of course, the quality of the product.
Step 3
The interests of the producer and the consumer will be satisfied if the market value of the product exceeds its cost by the amount of the producer's intellectual capital embedded in the product. The equilibrium position of the interests of the seller and the buyer is called market equilibrium. The profit of the enterprise will be an additional markup on the product, which is determined depending on the amount of expected income per unit of the product.
Step 4
The cost of goods covers all costs of the enterprise for its production and includes the cost of purchasing raw materials and equipment, labor costs and advertising. This concept is widely used in economic theory. The intellectual capital of the manufacturer is determined on the basis of the analysis of the production process, from the development of an idea to its implementation in a material unit of production.
Step 5
The development of an idea is a creative component and is carried out by employees of several departments, including the marketing department, which closely interacts with consumers through market research and surveys. Then, on the basis of the final idea, a technical solution is developed, possibly the creation of an exclusive industrial design, which requires a patent.
Step 6
Based on the test results of prototypes, the details of the future unit of production, the appearance are specified, and revision is taking place. Then the mass production of the product starts.
Step 7
As a rule, intellectual capital is embedded in the cost of a unique product that has no analogues on the market. In this case, the company has the right to set its own price, since the competition is close to zero. If the product is not unique, you should reasonably approach the formation of the margin, future profit depends on it.
Step 8
There are three methods for calculating the market value of a product: cost, market (comparative) and profitable. The cost method is based on the principle of "production costs plus profit". The prices of goods determined by this method have received the designation of prices with a focus on costs.
Step 9
The comparative method involves searching the market for products from other manufacturers that are similar to the proposed product. Comparison of prices takes place, but this method is only suitable if company employees have access to information on the prices of trade transactions of other manufacturers.
Step 10
The income method involves forecasting expected income and incorporating them into the formation of the market value of products. The advantage of this method is that it is more aimed at making a net profit, while its application is closely related to the other two methods.
