Pricing methods

Methods of pricing are economic methods of determining prices. It is well known that goods are produced only for the purpose of their subsequent sale. In this case, the sale of goods should bring a certain profit to the manufacturer, which would allow the business to develop. But if so, then the price of the goods determines whether its consumers will buy it, and if they buy, then the profit will be sufficient. That is why manufacturers pay special attention to pricing and the pricing methods with which it is implemented. Pricing methods are quite diverse, but in this article the main ones will be considered.

First of all, in the methods of pricing in a market economy, include the full cost method. In order to determine the price using this pricing method, it is necessary to take into account all the costs of producing the goods. These costs include the cost of fixed and variable capital, which was spent on the production of a unit of production. In other words, it is necessary to combine the cost of raw materials, equipment, as well as the cost of labor. Further, it is necessary to add to the resulting sum the rate of profit. Determining such a rate of profit is one of the most important and complex issues. As a rule, the average rate of profit taken by enterprises operating in the country's economy is taken. So, for example, if the cost of all costs is one hundred rubles, and the rate of profit is twenty percent, then the price of a unit of goods will be one hundred and twenty rubles.

Pricing methods can be quite complex, such as the return on investment method . The convenience of this method is that it takes into account the credit resources that are available to the enterprise. In the modern economy, an increasing number of enterprises receive loans from banks for development, that is, investments. Therefore, it is extremely important for the enterprise to take into account the interest it will have to return to the bank in the price of the goods. In this case, of course, take into account the remaining costs. So, for example, if the cost of all costs will be, as in the example above, one hundred rubles, but the enterprise will have to pay one percent for the repayment of the loan in unit terms, the price of the goods will be one hundred and one rubles.

Methods of pricing in a market economy include marketing assessments. This method is based on the study of whether consumers are ready to buy goods at a lower or higher price than other producers, and also to assess the profitability for the enterprise of reducing or increasing the price. So, if, despite the price reduction, say one ruble, the company's profit increases, then this decrease can be considered justified. If, however, with an increase in the price, all profits fall for the same ruble, this indicates that price changes are unacceptable. Such a study allows for a more flexible price policy, which as a result can positively affect the profitability of the enterprise.

All methods of pricing, whose economic bases are profit, are designed to study the actual situation on the market. So, some enterprises do not conduct independent calculation of the price, being guided in this question by the average price. In this case, the company can only monitor that the level of production costs is kept at a sufficient level for profit. That is why pricing begins with an analysis of the current situation with prices. Only after that, the company assesses how profitable it will be to follow these prices. It is important to remember that often enterprises are ready to sacrifice profits in order to win a new market or raise the level of recognition. This situation is typical for dumping wars.