Pricing factors

Understand the logic of pricing in the modern economic system is much more difficult that it was done earlier. Sometimes it seems that the price of the product does not make any sense. However, this is the buyer's point of view, and the buyer's position, although it is one of the main forces that affect the price, but is not able to explain it completely. The matter is that in modern conditions the enterprise is compelled to take into account all numerous factors of pricing , at definition of the most effective price that successfully to keep market positions.

There are several approaches to determining the underlying factors of pricing. The classical economic school conditionally shares all factors on factors of demand and supply factors. Demand is the desire and ability of a buyer to purchase goods at a certain price. In an ideal system, with an increase in prices, demand for goods falls. In turn, the offer is the ability and desire of the company to sell the product at a price of N. The higher the price, the more the goods the company will be able to deliver. Comparing the supply and demand, you can find an effective market price.

Unfortunately, in modern conditions the classical theory is no longer able to provide a complete analysis. Therefore today pricing factors are used, Based on pricing conditions, which represent an extended demand-supply model.

Pricing conditions are internal and external, respectively, and the factors are divided into internal and external. Internal factors of pricing are factors formed directly in the company itself. They are divided into two main groups: production conditions and marketing conditions. The first group, which includes factors such as costs, desired profit, payback point, etc., does not differ much from the classical market offer.

In turn, the pricing factors, Based on the terms of marketing, in the formation of prices began to be taken into account not so long ago. This group includes such subjective factors as commodity policy, existing channels of communication, opportunities for promotion, etc. The use of these factors makes it possible to pick up a real price that takes into account, in contrast to the mathematical price, the so-called working moments.

The company, however, can not proceed with the formation of a price only from its own interests. Otherwise, she will not be able to stay in the market for a long time, because competitors will easily take her out of the game. Therefore, external factors of pricing are even more important than internal factors.

External factors are also subdivided into two main groups: factors based on consumer behavior, and factors based on the behavior of competitors. The first subgroup is the pricing factors, Similar to the classical demand, such as: the usefulness of the goods, the interchangeability of goods, etc. All this can be expressed on the graph using the curve of consumer demand.

However, in the conditions of severe competition, the position of competing companies is more important than the wishes and aspirations of the consumer. The competitor's polity in many cases is the main factor, since "price games" force the company to form its own price regardless of the short-term economic effect. The won market share is more important than the lost profit or even the loss incurred by the company due to the establishment of a too low or too high a price. It is competitive struggle that sometimes makes prices really inaccessible to the logical analysis of the buyer.

Anyway, all the factors of pricing in marketing Are extremely important, and the leadership's ignorance of any of them or its misuse in the formation of prices can lead to catastrophic consequences.