Market pricing methods include: Selecting a Pricing Method

1. Current price method.

2. The “sealed envelope” method, or tender pricing.

Current price method. In cases where costs are difficult to measure, some firms believe that the current price method, or the price usually received for a product in the market, is the result of a joint optimal solution enterprises in this industry. Using the current price method is especially attractive for those firms that want to follow the leader. This method is used primarily in markets for homogeneous goods, since a firm selling homogeneous goods in a market with high degree competition, has limited opportunities influence on prices. In these conditions, the main task of the company is to control costs.

In an oligopoly, firms also try to sell their goods at a single price.

The "sealed envelope" method, or tender pricing, is used in industries where several companies are in close competition to win a particular contract. When determining a tender, they are based primarily on the prices that competitors can set, and the price is determined at a level lower than theirs.

However, if a product has some qualities that distinguish it from competing products, or is perceived by customers as a different product, its price can be set flexibly, without paying attention to the prices of competitors.

Market methods of price formation also include the price determination method, which is focused on finding a balance between production costs and market conditions.

TO economic methods Pricing methods include the following:

1. Method of specific indicators.

2. Regression analysis method.

3. Point method.

4. Aggregate method.

The method of specific indicators is used to determine and analyze the prices of small groups of products characterized by the presence of one main parameter, the value of which largely determines the overall price level of the product.

The regression analysis method is used to determine the dependence of price changes on changes in the technical and economic parameters of the product.

The point method is that, based on expert assessments of the importance of product parameters for consumers, each parameter is assigned a certain number of points, the summation of which gives a kind of assessment of the technical and economic level of the product.

The aggregate method consists of summing up the prices of individual structural parts of products included in the parametric series, adding the cost of original components, assembly costs and standard profit.

Tender pricing

The "sealed envelope" method, or tender pricing, is used in industries where several firms are in serious competition for a particular contract. The buyer announces a competition for sellers to produce goods with certain technical and economic characteristics. The prices set at the auction depend on:

· internal capabilities of the enterprise (availability of sufficient production capacity, labor force, financial resources, necessary for execution);

· assessing the possibility of winning bids at different price levels (this requires the enterprise to know competitors, the number of bidders, information about previous ones).

Tender– a written proposal of a price-offer by the offering company for a product or service.

Formation of the offer price is the most important stage of preparation for the tender for the tendering company. The success of the company at the auction and receiving an order directly depends on the correctness of its implementation.

To establish the optimal price level for a product, firms use two main calculation methods: focusing on costs and a given profit; focus on the prices of the main competitors or focus on one competitor - the price leader. The first method is called costly, the second - administrative.

Cost method uses information on full, direct, average, standard and marginal costs, taking into account the target price policy (target rate of return).

In a competitive environment, however, when forming tender proposals, companies are more focused on the demand and supply of competitors existing in the markets, i.e. the price is set administratively.

Administrative method otherwise called the method of calculating prices by comparison with prices of analogues. Competitive materials are usually used as sources of information for calculations, which can be divided into three main groups:

· prices of previously concluded contracts;

· information on contract prices of competing firms;

· exchange and auction materials.

At the first stage of pricing, the base price is calculated, which is done in the form of filling out a competitive sheet. The offer price is calculated by making amendments to the base price, taking into account the commercial terms of the contract being prepared.

This method is perhaps distinguished by the greatest accuracy and reliability and allows, given enough time and the necessary competitive information, to formulate a price that is more competitive compared to the price of competitors.

However, the option of concluding a contract through bidding, rather than direct negotiations with the buyer, dictates its terms to the seller in terms of pricing. Here it is necessary to take into account the peculiarities of the tender form for obtaining a contract, the absence of a negotiation process as such, and the short deadlines allotted by the organizer for bidding to prepare proposals.

If, when concluding a contract during negotiations, the seller, at an initially unacceptable price for the buyer, can quickly respond to his wishes and ultimately receive an order, then the bidder is not given such an opportunity.

Finally, the optimal level of the tender price directly depends on the state of the local competitive environment and any change in it, primarily a change in the composition of participants, has a tangible impact on it.

Thus, the method for forming tender prices should take into account:

· the need to formulate the offer price as possible short term;

· the competitive environment as a whole, contain a probabilistic mechanism for taking it into account and reflect the dependence of the optimal level of supply price on its changes.

Here we note that the nature of the competitive environment may develop in such a way that participation in tenders will be inappropriate.

The most common methods of setting prices based on competitive conditions are: the current price method and the “sealed envelope” method.

Current price method used primarily in markets where similar products are sold. A firm selling homogeneous products in a highly competitive market actually has very limited ability to influence prices. In economic literature it is called “a competitive market in its purest form.” Prices in such a market are formed as a result of the joint actions of well-informed buyers and sellers.

This approach to pricing is attractive to those firms that want to follow in their work a leader that already has a strong position in the market, assuming that well-organized enterprises with great potential know prices that are acceptable to the market. In this case, the company does not even have to make decisions on prices; its main task is to control its own costs.

Sealed envelope method or tender pricing, used in cases where several firms compete with each other for a contract (for example, a government tender). A tender is a price offered by a company, the determination of which is based primarily on the prices that competitors can set, and not on the level of its own costs or the amount of demand for the product.

The firm's goal is to win the contract, and therefore it seeks to set its price at a level lower than the price offered by competitors. If the company is unable to foresee the actions of competitors in relation to prices, it proceeds from the value of production costs. However, as a result of information received about the possible actions of competitors, the enterprise sometimes offers a price below the cost of its products in order to ensure full utilization of production capacity.

Market pricing methods also include a method based on break-even analysis and ensuring target profit. Using this method The firm seeks to set a price that will provide it with the desired amount of profit. Important has a calculation of the amount of product produced. This pricing method requires the firm to consider different options prices, their impact on the sales volume necessary to overcome the break-even level and obtain the target profit, as well as an analysis of the likelihood of achieving all this at each possible price of the product.

By nature, tenders are close and identical to the procedures for organizing procurement by large firms if they need to select a supplier for large quantities of new types of resources. Tender procedures are also mandatory when implementing loans or assistance programs from international financial organizations. The tender proposal is called an “offer”. This is an expensive and lengthy procedure.

If a company wants to win a contract, it will strive to set a price lower than that of its competitors. A prerequisite for participation in the tender is to justify the required product quality. Firms participating in bidding can set themselves the following goals: maximizing profits, penetrating a new market, ensuring the utilization of existing capacities and maintaining employment levels, creating a name in order to further conquer the market.

A competitive nature in determining prices is also characteristic of some wholesale markets, for example markets for the sale of agricultural products. It assumes such a trading situation when big number buyers seek to purchase goods from one or a limited number of sellers, or vice versa. In this case, the price that the buyer or seller considers acceptable is recorded on sheets of paper, sealed in envelopes, then they are collected and opened in the presence of those participating.

If the auction is organized by sellers and the competition is between buyers, the one who sets the highest price wins. If the auction is carried out by buyers (a competition between sellers), then the seller who sets the lowest price wins. A contract is then entered into between the parties and the price becomes the selling price. It is she who is published, i.e. becomes a carrier of information for decision making.

Bidding can be open and closed, public and secret. During open tenders, announcements about their holding are published in newspapers or specialized magazines. However, the term “open tenders” means not only open announcements about their holding, but, most importantly, all interested suppliers and contractors can take part in them.

In closed tenders, invitations to participate are sent directly by the auction organizers to the most well-known suppliers and contractors. Thus, the range of organizations and firms that can take part in the auction is limited. In some cases, open bargaining With prequalification of participants. At the same time, at the first stage, all interested participants are allowed to participate in the auction, and they are required to provide the tender committee with information confirming their high competence, experience in carrying out such orders and reliability.

When conducting public bidding, prices are held publicly in the presence of representatives of all bidders. Decisions about the winners, as well as information about the prices of other participants, are published in the press or communicated to interested parties.

During secret bidding, neither the composition of participants nor the prices they offer are announced. The decision on the winning bidders is communicated to them confidentially. Silent tenders are usually carried out in cases where subsequent placement of similar orders is planned and it is inappropriate to inform suppliers and contractors about the level of conditions acceptable to the customer. In a number of countries, the holding of secret tenders is stipulated by law.

Evaluation of the effectiveness of procurement is carried out by the buyer, as a rule, in the following sequence.

Stage 1. Determining the price of the product, which the buyer is inclined to consider as the best of the actually available alternatives, i.e. goods acting as analogues when calculating the price of the goods being valued. This procedure is not difficult in retail trade, but certain difficulties may arise when analyzing prices for industrial and technical products, because actual transaction prices may differ significantly from list prices.

Stage 2. Determination of all parameters that distinguish the evaluated product from an alternative product and quantification differences in parameter values. It is recommended to analyze the following parameters: main functional property; reliability; presence of additional properties (functions); content of beneficial (harmful) substances; maintenance costs; commissioning costs.

At this stage, an assessment should be made of the competitiveness of the product in terms of quality, i.e. Positive and negative differences were assessed.

Stage 3. Assessing the value for the buyer of differences in the parameters of the product being evaluated and the alternative product. The need for this stage is determined by the fact that for the buyer the benefit from the change various parameters will be different. As a result of completing a set of works at this stage, the pricing specialist must answer the questions: “Is the buyer ready to pay more for improving the parameters of the product and by how much? Will the buyer be attracted to a lower price for a lower quality product? How much should the price of a product with worse properties be reduced so that the buyer agrees to buy this product? How to answer these questions determines the variety of value pricing methods.

Stage 4. Calculation of the economic value of the product. It is carried out by summing the price of the alternative product and the estimates of the value of the differences obtained at the previous stage.

Stage 5. Calculation of the price of the product. Economic value is a guideline for setting the price of a product, which, depending on the chosen strategy, may be higher or lower than the economic value.

Stage 6. Depending on the admissibility of discussing competitive requirements at the contract discussion stage, bidding is held in one or two stages.

Single-stage tenders are held in one stage, where the conditions for its implementation, product characteristics and other commercial proposals are determined by the customer. In this type of tender, negotiations are prohibited.

Two-stage tenders are a type of tender that takes place in two stages with negotiations on the technical part of suppliers’ proposals being held at the first stage. The two-stage tender procedure provides that the tender organizer at the first stage develops an initial (approximate) version of the technical specifications, on the basis of which suppliers prepare initial tender applications (without indicating the price and other commercial conditions). Next, the tender organizer conducts negotiations at which various options for solving the problem proposed by suppliers are agreed upon, based on the results of which the tender organizer prepares the final version of the technical specifications.

Prices set at auction depend on the following factors:

· goals and objectives set by the enterprise - the bidder;

· internal capabilities of the enterprise (availability of sufficient production capacity, labor, financial resources necessary to fulfill the order);

· assessing the possibility of winning bids at different price levels (this requires the enterprise to know competitors, the number of bidders, and information about previous bids).

The tender is established taking into account the threshold price, this is the minimum price at which the seller agrees to sell the product or the maximum possible price when the buyer purchases the product.

Relative price thresholds represent a function of the consumer's assessment of the price range accepted by the consumer between the lower and upper price limits.

2. Features of determining prices in open and closed auctions

Auction(from the Latin auctio - sale by public auction) is a method of selling certain goods at prices set by buyers as a result of auctions.

Auction- this is a procedure based on the results of which a decision is made about who to transfer the lot to and how much each participant must pay. Participants indicate their willingness to pay and the said decision is made solely on the basis of the signals received.

As sellers and buyers, legal entities and individuals.

Organizers of commodity auctions can be individual large trading companies, unions or associations of sellers, or special auction brokerage firms. The role of auctions can be performed by large joint-stock companies that monopolize trade in some type of product. Usually they buy goods from commodity producers, then resell them to wholesale intermediaries and make a profit from the difference in prices. At the same time, they accept for sale on a commission basis products belonging to manufacturing companies, associations or cooperatives of farmers. It is also important that trading at such auctions takes place openly with the participation of the buyers themselves.

Holding auctions is possible not only by organizations for which this type of activity is the main one. There are also stock auctions; auction trade can be organized by art salons, galleries, etc.

Sellers offer their goods for sale. The most common items offered at auctions are tea, coffee, agricultural seeds, flowers, furs, breeding farm animals, industrial equipment, etc. In addition, there are auctions for the sale of works of art, jewelry, books, including antiques . Historically, each auction item has its own auction trading centers. For example, for furs and fur raw materials the main centers of trade are: St. Petersburg, New York, Montreal, London, Leipzig, Copenhagen, Oslo, Stockholm and some others. In total, over 150 international fur auctions are held in the world. The auction trade in tea is characterized by auctions being closer to the places of production of this product.

In the organization of auctions, despite their peculiarities, there is much in common, and first of all, these are the stages of auctions. Distinguish next steps holding auctions:

· preparation of the auction;

· inspection of goods;

· auction trade;

· decor;

· execution of the auction transaction.

During auction preparation the owner of the goods delivers it to the warehouse of the auction organizer. During this period, goods are prepared for sale, catalogs are compiled, advertising activities are carried out, large quantities of goods are divided into lots. Goods of equal quality are selected for the lot. The lot size depends on the value of the product. Each lot is assigned a number under which it is entered in the catalog of this auction indicating the characteristics of the lot. Several lots with the same quality indicators form thong. A representative sample is selected from each lot or string and displayed in a special room for inspection. During inspection of goods potential buyers have the opportunity to familiarize themselves with the lots and thongs put up for sale both on the basis of samples and, if desired, with all the goods in the auction warehouse. At auctions of food products, tastings are organized for buyers. Inspection is carried out according to the auction catalog, which indicates the numbers of lots and thongs, their characteristics, conditions of auction sale, date and place of opening of the auction, its duration and other rules of the auction. The main stage of the auction is bargain, which is conducted by the auctioneer together with assistants. It begins on a predetermined day and time in a specially equipped room. Decor The auction transaction is usually carried out immediately after the end of the auction. The buyer signs a standard contract, on the basis of which an invoice is issued, paid by the buyer. The final stage is execution auction transaction. Payment is usually made in installments. In case of failure to pay for the goods on time, the auction organizers consider the transaction to be broken and can dispose of the goods at their own discretion, and cover losses from the advance received. If the advance is not paid, the auction administration may consider the transaction invalid and dispose of the goods at its own discretion, demanding compensation from the buyer for losses.

Setting prices in market conditions consists of finding a price that would represent the optimal balance between the amount that a buyer would be willing to pay for a product and the costs of the enterprise in producing it. During the pricing process, costs should not be exceeded. Cost methods, which are based on the orientation of prices on production costs, are among the most common in pricing. IN general view their essence is that a fixed profit margin and indirect taxes are added to the calculated cost per unit of production:

C = S + P + N,

where C is the cost per unit of goods;

P - profit per unit;

N - indirect taxes and deductions included in the price of the product.

The average cost plus profit method is the most popular of all cost-based methods. The price in this case is calculated in the simplest way, which involves adding a certain markup to the cost of the product. However, this raises the question: what cost should be taken for calculation?

The advantage of this method is its simplicity. Sellers know more about costs than about demand, so based on costs, retailers simplify the pricing process for themselves. The main disadvantage of this method is the lack of flexibility, since when using it it is impossible to take into account the state of demand and competition, and therefore there is no possibility of quickly responding to changes in the market situation. For enterprises using this method, there is a real threat of ruin. At the same time, the use of this method is quite acceptable in industries with low competition, and prices here are traditionally set on its basis.

In domestic practice, cost-based methods are used when setting prices:

- for fundamentally new products, when it is impossible to compare them with manufactured products and the amount of demand is not sufficiently known;
- products produced according to one-time orders with individual characteristics production (construction, design work, prototypes);
- goods and services, the demand for which is limited by the solvency of the population (repair services, essential products).

Cost-based methods are quite popular not only in domestic pricing practice, but also in foreign ones. First, manufacturers are always more aware of their costs than they are of consumer demand. Therefore, cost-based methods are considered quite simple. Secondly, they are the most fair to both sellers and buyers. When demand is high enough, sellers do not make money at the expense of buyers and at the same time receive the necessary profit for normal activities. Along with the advantages, cost-based methods also have disadvantages associated with the impossibility of taking into account the consumer properties of goods when setting the price of demand.

There are also market pricing methods:

This group of methods takes into account the competitive advantages of goods and manufacturing enterprises. The methods are used as part of an active pricing strategy, focused on a specific combination of price and quality of the product.

Using such methods, enterprises proceed from the consumer’s willingness to pay a certain price (upper price limit). If you do not take into account the need to operate with prices above the lower limit, then when focusing on consumers there will be no direct connection between costs and pricing. Having their own ideas about the maximum price they are willing to pay, consumers set a certain limit beyond which demand for a product will cease, either due to financial constraints or because at that price a better product can be purchased.

According to a number of pricing experts, the only factor that should be taken into account when setting a price is the level of demand. In a number of industries where there is serious competition between several firms to obtain a full contract, the "sealed envelope" method, or tender pricing, is used. Market methods of price formation also include the price setting method, which is focused on finding a balance between production costs and market conditions, and the method of determining prices based on the perceived value of the product. In cases where costs are difficult to measure, the current price method is used, which is preferable for businesses that wish to follow the leader.

The mark-to-market pricing method is where prices are set based on prices accepted in a given market. This applies to prices that are maintained at a stable level for certain goods over time in a particular market space.

By setting a price based on the current price level, the firm mainly takes into account competitors' prices and pays less attention to its own costs or demand.

It may set a price at, above or below the price of its main competitors. In this case, regardless of the size of the market share occupied by a given company in the market, even with a slight increase in price, there is a sharp reduction in sales of the corresponding goods, and vice versa, with a slight decrease in price, a sharp increase in sales is possible. Regular prices are set for goods such as chocolate, tea, juice, etc. In order to abandon the usual prices and ensure their increase, they improve the quality of the product, its functional properties, packaging, style, design, make it more attractive, adapting the product to the market of predicted buyers. Without this, it is impossible to change the usual price.

The current price level pricing method is quite popular. In cases where the elasticity of demand is difficult to measure, firms believe that the current price level represents the “collective wisdom of the industry” and guarantees a fair rate of profit. In addition, they believe that maintaining the level of current prices will allow maintaining a normal balance in the industry.

- goals and objectives set by the enterprise - the bidder;
- internal capabilities of the enterprise (availability of sufficient production capacity, labor, financial resources necessary to fulfill the order);
- assessing the possibility of winning tenders at different price levels (this requires the enterprise to know competitors, the number of bidders, information about previous tenders).

When determining a tender, they are based, first of all, on the prices that competitors can set, and the price is determined at a level lower than theirs. However, if a product has any qualities that distinguish it from competing products, or is perceived by customers as another product, then its price can be set flexibly, without paying attention to the prices of competitors.

Closed bidding, or tenders, are used in many countries around the world to place government orders, obtain contracts, etc. A tender is the selection of suppliers of products or services.

The advantages of market pricing methods over cost ones are explained by the difference in approaches to setting prices. First, market methods are strictly market oriented. They are based on marketing research, which consists of collecting information and assessing competitors and consumers. Cost-based methods are focused on costs and, as shown above, are not always optimal for the competitive operation of a company. Secondly, market methods allow you to create a cost control tool. By determining the maximum permissible cost limit, the company, in the event of a discrepancy between the target and actual costs, has the opportunity to conduct an analysis and find ways to reduce the latter.

Through price, an indirect measurement of the socially necessary expenditure of labor time on the production of goods and services is carried out. It determines commercial results and influences both the competitiveness of goods and the production and marketing activities of the enterprise. Price is a means of establishing certain relationships between buyers and the enterprise and contributes to the formation of its image.

Market methods.

I) Some experts believe that the level of demand may be the only factor that should be considered in determining prices. With this approach to determining the price of its product, the company proceeds from the position that the consumer independently assesses the value of the product (service), taking into account the main and additional (for example, psychological) advantages of the product compared to similar ones on the market, the level and quality of after-sales service by the company goods, etc. and, taking these circumstances into account, determines the relationship between the assessment of the usefulness of the product and its price.

The main factor in this method is not the seller’s costs, but consumer perception, which allows the buyer to choose the most optimal product from the entire offered range in terms of price and quality, taking into account that purchasing an expensive product may be more expedient than purchasing a cheaper analogue. (printers).

II) Another way of presenting the actual value of a product to the buyer is break down its cost into components, the most significant of which is unit cost. (razor with replaceable blade). With such a pricing system, the consumer will give his money for what is “value” for him, and not for what is “cost” for the manufacturer (supplier).

III) Another example of the buyer’s value perception of a product - end benefit effect. The buyer is always interested in the percentage of profit from the funds invested in a particular purchase. (saving working time from buying a computer)

Behavioral characteristics of consumers have great importance from the point of view of pricing policy. Price sensitivity is characterized by elasticity.

Knowing price elasticity allows you to calculate the optimal sales price that maximizes profit. But despite the great information content of elasticity coefficients, this method of pricing is used very rarely in practice, since a number of conceptual and practical difficulties are associated with the concept of elasticity:

1. Elasticity cannot be used to set prices for new products, since elasticity measures purchasing behavior, that is, it is determined “in hindsight,” and its predictive value depends on the stability of the conditions under which the observation was made.

2. In many cases, the problem is not only knowing how to tailor price to real market sensitivities, but also determining how to influence those sensitivities in the direction desired by the firm.

3. Elasticity modifies the effect of price on purchase volume, but not the effect of price on characteristics important for understanding buyer response to price, such as willingness to try a product, level of exclusivity, brand loyalty, etc.

Moreover, in practice it is often very difficult to obtain elasticity estimates that are sufficiently stable and reliable to “calculate” the optimal price from them.

IV) When using demand-driven method production costs are considered only as a limiting factor, below which the sale of a given product is economically unprofitable. Moreover, production costs may be the same at different price levels.

The influence of the competition factor on the decision to set the price of a product depends on the structure of the market. Companies that follow this tactic will set the price of their product slightly higher or slightly lower than their competitors.

The most common methods in this case for setting prices are the current price method and the “sealed envelope” method.

^ Current price method . In cases where costs are difficult to measure, some firms believe that the current price method, or the price typically received for a product in the market, represents the result of the joint optimal decision of the enterprises in the industry. Using the current price method is especially attractive for those firms that want to follow the leader. This method is used primarily in markets for homogeneous products because a firm selling homogeneous products in a highly competitive market has limited ability to influence prices. In these conditions, the main task of the company is to control costs.

In an oligopoly, firms also try to sell their goods at a single price.

^ Sealed envelope method ", or tender pricing, is used in those industries where several companies are in serious competition to receive a particular contract. When determining a tender, they are based primarily on the prices that competitors can set, and the price is determined at a level lower than theirs.

However, if a product has some qualities that distinguish it from competing products, or is perceived by customers as another product, the price for it can be set without paying attention to the prices of competitors.

To set prices taking into account demand, it is necessary to constantly study the market, examine the relationship between prices and demand, study the expected situations for purchasing goods on the market or intentions to purchase them.

V) Market methods of price formation also include a price determination method focused on finding a balance between production costs and market conditions. Its algorithm can be presented as follows:

1. Based on the company’s capacity, a plan for sales volume is determined, in accordance with which production costs are calculated.

2. Based on a study of demand, the level and ratio of prices for similar types of products produced by the company and its competitors, the planned price and the corresponding profit are determined, which will begin to flow only after reimbursement of fixed costs.

3. Based on the demand function, various sales tactics are developed by analyzing various combinations of “price-sales volume” and selecting the one that provides marginal profit (the difference between revenue and variable costs). At this stage, the price selection is preliminary, because When calculating sales volumes, it is necessary to take into account the actions of competitors and the real capacity of the market.

4. An assessment is made of the strength of the product’s position and the company’s reputation in the market in comparison with competitors, as well as an assessment of the competitiveness of this product based on the technical and economic parameters of the product, and it is determined to what extent the price level, calculated on the basis of production costs, fits into the scale of market prices for similar products

5. The so-called indifferent price is determined, that is, the price at which the buyer will be indifferent to which product to purchase: this or a competing product.

6. The price established taking into account the described algorithm should be adjusted in accordance with the requirements to ensure a given level of profit and the current situation on the market.

At the same time, it must be borne in mind that the manufacturer must provide a certain price ratio not only in relation to competitors’ products, but also to other products of this company. When setting prices within the product range, it is necessary to determine the price lines associated with the sale of goods in a price range, where each price reflects a certain level of quality of different models of the same type and purpose of the product.

When deciding on the final price level, it is necessary to take into account the possible consumer reaction to it.

VI) Managers of companies using competition-oriented price determination method, believe that it is safer for them than other methods. For example, if a competitor’s price is 10,000 rubles, then this company’s price may be 9,600 rubles, and in this case it is possible to maintain or even increase the market share and profit of the company.

With this method, the price does not change even when costs or the level of demand changes, only because competitors do not change their prices either. At the same time, as soon as competitors change prices, the firm changes prices for its goods, although costs and demand remain unchanged.

This method is preferred by firms that find it difficult to determine their own costs and consider current prices basis for determining prices for their goods. This avoids the risk associated with setting your own price.
^

Econometric m Methods for determining prices.

Specific indicator method used to determine and analyze the prices of small groups of products characterized by the presence of one main parameter, the value of which largely determines the overall price level of the product. With this method, the unit price Tsud is initially calculated:

Tsud=Cb/Pb,

where Cb is the price of the basic product, Pb is the value of the parameter of the basic product.

Then the price of the new product Tsn is calculated: Tsn=Tsud*Pn;

where Mon is the value of the main parameter of the new product in the corresponding units of measurement.

(For example, the price of a basic product is 10 units, the power is 2 units, then the cost of a new product with a capacity of 5 units = 10/2*5=25 units)

This method can be used to justify the level and price ratios of small parametric groups of products that have a simple design and are characterized by one parameter. It is extremely imperfect because it ignores all other consumer properties of the product and does not take into account alternative ways use of products, and completely ignores supply and demand.

^ Regression analysis method used to determine the dependence of price changes on changes in technical and economic parameters of products related to this series, construction and alignment of value relationships:

C = f(X1,X2,...Xn),

where X1,2…n are the parameters of the product.

The quantitative relationship between changes in the effective (C) and factor (Xn) characteristics is based on the method of regression analysis. In this case, various regression equations can be obtained:

linear: (у=а0+аixi)

power: ()

parabolic: (y = a0+aixi+bixi 2)

If prices for products already included in the parametric series were obtained by the same method, then one of the conditions for using regression analysis is grossly violated, namely the condition of independence of observations. Nevertheless, this method can be very successfully applied in a market economy. A firm may use a regression equation to set the initial "trial" price for its new model.

^ Point method. It consists in the fact that, based on expert assessments of the importance of product parameters for consumers, each parameter is assigned a certain number of points, the summation of which gives a kind of assessment of the technical and economic level of the product. The price of a new product using this method is calculated as follows:

1) the price of one point is determined:

. Where

CB - price of the base product,

Bbi – point estimate of the i-th parameter of the basic product

Vi – parameter weight

2) the price of the new product is determined:

where Bni is the score of the i-th parameter of the new product

This method is used to justify prices in cases where it is important to evaluate the reliability of operation, the appearance of the product, etc. The use of this method is associated with a large amount of subjectivity.

^ Aggregate method consists of summing up the prices of individual structural parts of products included in the parametric series, adding the cost of original components, assembly costs and standard profit.
^

Price indices.

Calculation of average prices makes sense only for groups of homogeneous goods, but if the group of goods is heterogeneous (for example, a group food products), then indices are used to assess price dynamics.

Price indices are indicators of price dynamics for a certain period.

^ Comparison of prices of one product carried out using individual price index:

,Where

Pi0 is the price of the i-th product in the base period

Pi1-price of the i-th product in the reporting period

^ Dynamics of prices for a group of goods (services) reflects composite price index. It is defined as the ratio of the cost of a group of goods sold in the reporting period, calculated in actual prices and prices of the base period. This is how, for example, the price index of manufacturing enterprises for industrial products is calculated:

,Where

Qi1- quantity of i-th product in the reporting period

n- number of i-th products included in the group

The composite price index is used as one of the main indicators of inflation processes in the real sector of the economy.

When analyzing the pricing system, the following must be taken into account. Firstly, all the variety of types of prices must be considered in unity; a change in some types of prices necessarily entails a change in other types of prices. Secondly, the variety of prices, the difference in the specific tasks of setting them should not lead to price contradictions, but should be subordinated to national interests.
^

And stock market indices.

Studying the dynamics of the stock market allows us to more or less reasonably judge the current situation in this market, the investment attractiveness of individual securities and the economy as a whole, since the stock market is very sensitive to various changes as a result of economic and political events. The dynamics of the stock market is one of the important points when assessing market conditions for making decisions on setting prices.

Stock indices are numbers that characterize the level and dynamics of prices for shares of companies included in the index list at a certain point in time. Currently existing indices can be classified according to a number of criteria: according to the degree of market coverage, according to the calculation method, according to industry and regional characteristics. Grouping indices by industry, for example, makes it possible to judge which of them is in decline and which, on the contrary, is on the rise. In a similar way, the situation on the world market can be determined in comparison with the situation on a particular national or regional market. Therefore, let's look at the world's most famous stock indices.

The oldest and most famous stock price index in the stock exchange world is the Dow Jones Average. It was proposed back in 1884.

The essence of this index is to calculate a simple arithmetic average of the prices of shares that were sold on the stock exchange. Thus, it reflects the average price level. This index is calculated using the following formula:

where P is the price shares i corporations,

n - number of corporations,

K is the divisor coefficient (taking into account the adjustment of the number of corporations when companies split their shares).

The index is calculated in monetary units and can be expressed as a fraction. Thus, on the New York Stock Exchange, rates exceeding $2 are taken into account in multiples of 1/8, and below $2 - in multiples of 1/16. The purpose of continually adjusting the index using a divisor is to ensure that it is comparable before and after companies split their shares.

There are four types of the Dow Jones Industrial Average. The first is calculated by shares of 30 industrial corporations (Dow-Jones Industrial Average), which includes such American companies as Coca-Cola, IBM, Boeing, etc. These 30 companies account for about 1/3 of the daily exchange turnover. The second is calculated by shares of 20 transport companies (Dow-Jones Transport Average). The third is for 15 utility corporations (Dow-Jones Utility Average). All this ensures some sectoral homogeneity of the index and the factors influencing it. And finally, the fourth index is a composite index, calculated for 65 corporations (Dow-Jones Composite Average).

The Dow Jones indices are easy to visualize graphic image and thus allow us to illustrate the vector, speed and trend of price changes, as well as their fluctuations. The great advantage of this index is comparability, which provides a long-term dynamic series, but it also has disadvantages. First of all, this is the limited range of corporations included in the set, as well as the use of a simple arithmetic average when calculating the index. In this regard, other indices have been proposed, characterized by a larger sample size and the use of a weighted arithmetic average. For example, the New York Stock Exchange composite index includes 1,500 stocks, etc.

Another American index, the S&P-500 (Standard and Poor's), has become very popular. It covers shares of 500 companies, including 425 industrial ones. Its main feature is that the calculation does not use the principle of equal weighting of prices by the number of shares sold. Thus, it reflects the role of each set of shares in the process of their implementation and takes into account the degree of influence on the result of the most active shares with a larger mass of value.The formula for its calculation is as follows:

where Pi0, Pi1 are quoted prices of shares in the base and current periods;

Qi0, Qi1 - sales volume of shares in the base and current periods.

A very original technique is used to calculate the popular British FT (Financial Times) index. It is calculated in two versions: for 30 largest and 100 small companies. Its construction is based on the geometric average of equally weighted daily growth rates of stock prices. As a result, this index reflects not the price level, but their changes, and in market statistics it is considered one of the most sensitive indicators of the stock market.

It is calculated by the formula:

where Pit, Pit-1 are stock prices i-th company the current period and the previous one.

About 20 stock market indices are regularly published in the United States, 25 in Europe, and Japan also has its own indices. As global integration intensifies financial market a number of financial institutions began to calculate international indices. For example, there is the EAFE index - an index of Europe, Australia and the Far East, which covers more than 2,000 companies from 21 countries.

Among the Russian stock market indices, the most famous is the index

AK&M, Interfax, Grant Financial Center, RK-30, SOBI, ROS-index, Kommersant. Most of These indices are determined on the basis of company stock quotes on the over-the-counter market. Index lists of stock indices differ slightly. The differences are based on the question of a numerical assessment of the representativeness of the market in question and the degree of necessary accounting of quotations

World market prices. Patterns of formation of world prices.

^ World price -

The main objectives of foreign trade policy:

ensuring the competitiveness of domestic products in the foreign market;
protection of domestic producers;
fiscal tasks.

The instruments for implementing foreign trade policy are:

differentiation of customs duties;
use of dumping prices;
the introduction of direct bans on the import of products that can cause damage to domestic producers and the population;
government subsidies to exporters.

The main economic levers are the differentiation of customs duties and the establishment of a procedure for determining customs value. To better understand this issue, it is necessary to define some concepts.

If there is no information on absolute price levels, the required price levels determined by calculation. For this purpose, average, specific indicators of material intensity, labor intensity, capital intensity, and profitability by industry are used. These indicators are published in international statistical collections.

Given the wide variety of information on world prices, it is necessary to know at least the basic rules for its use.

You should not limit yourself to local price indicators, even operational ones; it is necessary to analyze dynamic price series. This increases the correctness and objectivity of price indicators, especially if they are not prices of actual transactions, but prices of sellers. Price analysis for long time allows you to more clearly determine the seller’s price allowance and level out speculative price fluctuations.

If a product is sold on more than one market, it is necessary to carefully compare the prices of all forms of trade organization. For example, many raw materials are sold both through the exchange and under direct contracts (oil, fuel oil). In this case, both stock quotes and reference prices are analyzed.

In relation to non-standard products, which are characterized by offer prices, it is necessary:

1) take into account the prices of offers not from one company, but from at least three or four (international experience);

2) ensure that these are leading manufacturing companies, and not intermediaries;

3) find out whether the prices taken as information are intracorporate transfer prices.

These prices are not intended to reflect global market conditions, but to solve internal corporate problems.

It should also be remembered that the less regularity, scale of transactions and homogeneity of products, the less correct the price information, the more methodological processing it requires for use as a guide.

Main types of prices in world trade

^ World price - price reflecting the most representative transactions for this product on international market. The most regular transactions taking place in a free trade and political regime and in a freely convertible currency are considered representative. To avoid methodological errors and discrepancies, information on world prices must be accessible.

main types of world prices depending on the characteristics of markets for various goods and sources of information about them.

^ Prices of international exchanges (international stock quotes) - prices of a permanent wholesale market for mass, homogeneous goods. Exchange prices are calculated and published by the exchange quotation commission in exchange bulletins, information and telegraph agencies, as well as in mass periodicals. Exchange prices apply mainly to commodities.

^ Reference prices - prices for goods sold through domestic wholesale and international trade channels. These prices are calculated and published by producer associations in periodicals, as well as by information agencies and brokerage firms. Reference prices are seller prices and not actual transaction prices. The reference price always includes a margin for bargaining, which makes it difficult to use reference prices for information purposes. These prices apply to raw materials, materials, fuel, chemical products, and rolled metals.

There are reference prices for exporters and importers. Reference prices are wholesale prices.

^ Price lists, catalogues, brochures . These prices are developed by manufacturers for basic types of mass-produced goods. List prices are published in industry publications. This group prices - sellers' prices. This is their similarity with reference prices, but unlike them, list prices can be both wholesale and retail.

List prices apply to standard, commonly used products in generally competitive markets, so when developing list prices, competitors' prices are taken into account first. Due to the large number of items in the list of price lists, price indicators are published with a high degree of averaging.

^ Offer prices are developed for small-scale and individual production products and are reported by manufacturers. Taking into account the special nature of the products, prices may be published in advertising brochures, newsletters, industry periodicals, but they may not be published at all, and information about them is sent only through direct channels to the customer. Offer prices are sellers' prices.

When forming supply prices, due to the specifics of goods, what is primarily taken into account is not market conditions, but internal production conditions. Price calculations can be based on the costs of production, the use of parametric, normative-parametric methods, methods taking into account the consumer effect, expert methods.

^ International commodity auction prices - prices valid on public sale markets specially organized for a certain period in predetermined places. These prices apply mainly to agricultural products, fishing, hunting, gems, works of art, i.e. mainly non-standard products requiring preliminary inspection and demonstration. Unlike exchange prices, auction prices are set only for available goods. The level of the starting price is determined by the cost of the goods being sold, the frequency of the auction (the greater the regularity, the smaller the amplitude of fluctuations in the starting price), as well as the entrepreneurial abilities of the seller. The level of the actual sale price depends on market conditions and the professional abilities of the auctioneer (the employee conducting the auction).

Both the starting price and the actual sale price strongly depend on the level of the auction and its reputation on the world market.

^ International auctions - usually large joint stock companies that monopolize trade in a given product. They buy goods from manufacturers and resell them to wholesale intermediaries.

Another form of organizing an auction is specialized brokerage firms , engaged in the resale of goods on a commission basis on behalf of their clients - sellers and buyers. Clients do not participate in the auction, but pay brokers a fee.

Organizers of an auction sale can receive remuneration as the difference between the purchase and sale prices of goods or in the form of a commission percentage of the cost and level of the sale price.

^ International auction prices - prices for a specialized form of international trade based on the issuance of orders for the supply of goods or the delivery of contracts for certain work. This type of price is often the subject of government intervention.

Price information from auctions and trades is mostly irregular and closed.

Very important price information are prices actual transactions when concluding direct international contracts . These prices most objectively reflect market conditions. However, the latest information about them is a trade secret.

Prices and money circulation. The problem of inflation.

^ Inflation as an economic category reflects the redistribution of national income between spheres of social reproduction, sectors and regions of the national economy, between classes and social groups population, carried out through the mechanism of price changes.

Since prices act as a monetary form of the cost of goods and services, inflation can also arise as a result of the excess of the number of paper monetary units in circulation over the sum of commodity prices and manifest itself in rising prices and a decrease in purchasing power (depreciation) monetary unit. The quantity and issue of banknotes in circulation has a significant impact on the level and rate of inflation.

Inflation is one of the main destabilizing factors market economy, and the higher its level, the more dangerous it is.

Inflation is measured using a number of indicators.

The most widely used are the following:

Price index;

Ruble purchasing power index;

Inflation rates;

Wage index;

Real income index of the population.

In everyday practice when analyzing economic activity The most widely used are price indices, inflation rates and wage indices.

Price indices are calculated by government statistical agencies and regularly published in the press.

As evidenced by the above data, processes of high inflation are taking place in Russia in the context of an ongoing decline in production, with the persistence and periodic aggravation of commodity shortages and with a steady depreciation of the ruble against the dollar and other hard currencies.

According to pricing methods based on competition the company focuses not on costs and demand, but on the current prices of competitors, setting its own prices a little higher

or lower. In their pure form, these methods are used by those firms that can accurately determine their costs of producing a unit of output and that consider the average price to be a completely acceptable base for their own pricing. By relying on them, such companies avoid the risk of setting their own price, which the market may not accept. In addition, they usually do not change prices due to changes in production costs or fluctuations in demand, but keep them unchanged until competitors' prices change. Once this happens, companies also adjust their prices, although their own production costs and the level of demand remain unchanged .

Competition-oriented pricing methods have obvious advantages. They prevent price wars that hurt everyone involved. These methods are simple, convenient, and particularly valuable when it is difficult to determine costs, competitive response, and demand. At the same time, they also have disadvantages. First of all, each competitor has its own specific cost structure, goals, sales and financial capabilities, so copying the actions of the leader is not always advisable. In addition, it is difficult to find absolutely identical products, then the company's product may be perceived by customers as significantly better than a competitor's product. Failure to take these factors into account may result in the enterprise not receiving potential profits.

5) method of setting prices based on the market force coefficient;

6) pricing taking into account the competitor’s reaction to price changes;

7) method of setting prices taking into account price classes

Method of focusing on current prices

The method of focusing on current prices is that each seller sets the price based on the prevailing market price level. It is used in markets of homogeneous or weakly differentiated products - cement, sugar, agricultural products, etc. It prevails in markets of perfect and oligopolistic competition, as well as in international pricing. Method of following the price leader

. Method of following the price leader lies in the fact that the company focuses on the price level of the industry leader, since it has no special competitive advantages and famous trademark. Such pricing is found in the automotive industry, fuel trading, etc.

Tender pricing (sealed envelope method)

. Tender (competition, bidding) - this is the selection of suppliers of products or services for industrial purposes using a formalized auction-type procedure. The tender pricing method is used if several firms compete with each other for a contract to carry out a specific production and technical project.

The goal of each competitor is to win the tender, therefore, when setting a price, the company is based on the characteristics of its competitors, and not on the relationship between this price and its own costs and demand. He doesn’t intend to win the contract, but to do this he needs to offer a price lower than others.

At first glance, it may seem that tender pricing is price competition in its purest form, but this is not always true. The most important factor in winning tenders is offering the best value-price ratio. Therefore, before the start of bidding, the company must convincingly prove that the quality of its products is not lower than the level specified by the terms of the tender. When the tender committee, based on the average conclusion of experts (based on an analysis of the technical, financial and managerial characteristics of the company), is convinced of the quality of the service, and is also satisfied with the price, then the company receives the order quite naturally, that in most cases the order is issued with a cheap offer proposition.

The company carefully prepares for the tender and develops a high-quality tender proposal (offer). This process is an expensive and lengthy procedure, and the profitability of the operation in case of victory largely depends on the level of qualifications of the company’s specialists and its preliminary experience.

When determining its price, a firm must take into account three important factors:

1) the estimated number of possible participants - the more there are, the more prices should be reduced, since the likelihood that one of them will offer a lower price increases;

2) the expected range of possible prices;

3) the goals that the company sets when participating in the tender. Information about possible prices and number of company participants

receives from data on past tenders or based on expert heuristic conclusions (if tenders are held for the first time). As for the company's goals, special attention should be paid to them when setting prices. The goals of firms' participation in tenders can be different: obtaining maximum profits; loading of free production capacity; hope for further orders; penetration into a new market, maintaining employment for valuable employees, increasing production, sales and profits, ensuring the survival of the company, etc.

The set goal affects the level of the offered price. In any case, the task of pricing comes down to setting the maximum price, which would be at the same time less than the minimum price proposed by other participants. Sometimes, in order to increase the likelihood of receiving an order, the company even offers a price below its costs (it is clear that then it does not pursue the goal of making additional profits).

The tender pricing algorithm consists of the following stages:

1) determining the goals of the company’s participation in the tender;

2) assessment of internal capabilities;

3) collecting information on the number of possible participants and their prices;

4) determining the likelihood of receiving a contract at a specific price and tender conditions;

5) calculation of profit at different prices taking into account the probability of winning the tender at each price. Here, the marginal analysis technique is used, and the calculation of marginal income is carried out using the formula:

MP i = (C - AUS). R i,

Where And - price option;

MP i - marginal profit at and-and price taking into account the probability of winning the auction; AUS - specific variable costs;

P i - probability of receiving an order when і -and price

Offers include the price that maximizes marginal profit. However, such an unambiguous conclusion is valid for those firms that participate in many tenders and must form their own portfolio of proposals in accordance with the task of maximizing the total amount of winnings if the company operates in a market that is in a state of stagnation or is experiencing serious financial difficulties, then the price that promises the greatest chance of winning, at least with a minimum (minimum acceptable) amount of marginal profit, may be acceptable to her.

. Example 423

The government invited the furniture factory to take part in the bidding to place an order for 1,000 school desks. The factory uses 55% of its production capacity, producing 3,000 desks, and sells their store to us at a price of 190 UAH per desk. Variable costs for one desk is 50 UAH, fixed costs- 60 UAH. The company as a whole is provided with sufficient profit, therefore, offering an extremely low price at the auction - the “survival price” The purpose of its participation in the auction is to maximize profits, and determine the price of the offer and the price of the offer.

It is known that the government wants to purchase school desks at a price 20% below the market price. Thus, the upper limit of the supply price for the factory will be 0.8 190 = 152 UAH. The lower limit of the price equal to variable costs is 50 UAH.

To determine the range of possible prices, the factory analyzed past auctions and found that their winners offered prices 40-45% lower than the open market price. There is also information that five firms are participating in the tender. Factory specialists by expert method We identified options for possible prices - from 50 to 152 UAH per desk (and the price of 50 UAH was not considered due to its unprofitability), as well as the desire to win the tender at each price, on the basis of which we calculated the possible income. Note that since the factory operates at significantly underutilized capacity, its fixed costs will remain at the same level regardless of whether the company receives the order or not. Therefore, the basis for calculation is specific variable expenses- 50 UAH, and the object of analysis is marginal profit. The results of the calculations are summarized in Table 42l. 4.28.

. Table 428 . Analysis of possible offer prices

Indicators	Meaning
Possible offer prices, UAH
Share of possible price in the market price (190 UAH),%
Variable costs per batch of 1000 pieces, UAH
Revenue from a batch of 1000 pieces, UAH
Marginal profit from a batch of 1000 pieces, UAH
Probability of winning the auction,%
Probable profit from a batch of 1000 pieces, UAH	20000 0,95 == 19000	40000 0,75 == 30000	55000 0,5 == 27500	70000 0,4 == 28000	80000 0,3 == 24000	102000 0,05 == 5100

So, the company will receive a maximum profit of 30 thousand UAH by offering a price of 90 UAH per desk

It is necessary to pay special attention to the number of bidders as most important factor to calculate the probability of winning. The more there are, the higher the likelihood of competitors offering a low price, so the company should consider options for a larger price reduction. For example, if not 5, but 15 firms were expected to participate in the auction, then the possible offer prices should be revised downward.