The success of an enterprise in the market depends on how correctly the strategy and pricing tactics have been chosen. In turn, pricing depends on many factors.
Instructions
Step 1
When determining the price of a product, it is necessary to take into account both external and internal restrictions. External prices include competitors' prices and purchasing power. Internal - costs and profits.
Step 2
The price of a product is determined after performing a series of actions. Of course, each product has its own price. But not every enterprise can independently install it.
Step 3
Very often there are many competitors in the niche in which the company operates. Lacking market power, the firm must accept the market price.
Step 4
In determining the price, a lot depends on the financial strength of the company, its size, and the characteristics of the product. The pricing is also influenced by the company's own goals.
Step 5
When choosing a method for calculating prices, it is necessary to take into account the degree of novelty of the product, the stage of its life cycle, and the presence of quality differentiation.
Step 6
The cost of production determines the lowest possible price. The maximum possible price depends on whether the product has unique advantages. The price level for competitors' goods and the cost of substitute goods characterize the average price level.
Step 7
The calculation of a favorable price consists of several stages. First, you need to define prices and pricing objectives. The more clearly the goal is formulated, the more accurately the price will be chosen.
Step 8
The definition of demand is very important. When it is large, the price can go up. The inverse relationship is also true. The production costs in both cases will be unchanged. Therefore, the company needs to assess the price elasticity of demand.
Step 9
The next step is to estimate production costs. At this stage, the company must determine gross, variable and fixed costs. Enterprises seek to set a price that provides a fair profit and covers all production costs.
Step 10
Then comes the stage, which consists in studying the goods and prices of competitors. After analyzing, the company chooses the position of its product in relation to the products of competing companies. After analyzing, you can set a higher or lower price than competitors.
Step 11
It is important to predict the response or reaction of competitors to the appearance on store shelves of a product with an appropriate price. After that, you can proceed to the choice of the pricing method and to the calculation of the original price.
Step 12
The company must consider additional factors that affect the price level. This takes into account the reaction to the price level not only on the part of buyers. It is necessary to take into account the reaction of competitors, intermediaries, and the state.
Step 13
The process ends with the establishment of the final price, which will be fixed in the documents.
