Pricing in Trade

As a kind of entrepreneurial activity tradeis the resale of goods. Trade organizations, not being producers of products, act as intermediaries between manufacturers and potential and real buyers.

Wherein pricing in trade is mainly based on the principle ofprofit. Since the main source of profit is a well-formed price, it plays one of the most important roles in the commercial sphere in the entire process of economic activity.

Therefore, pricing in trade is one of the priority activities of specialists, in whose competence is the sphere of ensuring the interests of the company and its strategic development.

Pricing in trade based on such concepts as structure, composition of prices, prices for a similar product, price index, distribution costs, competitors' prices, rate of profit, and others.

The mechanism of pricing provides for various patterns, pricing methods and pricing principles (validity, price unity, continuity, control, purposefulness).

To establish prices for goods, the trade organization must take into account a whole set of factors that can influence the price and its level.

At the core of the price formation mechanism the principles and methods by whichprices. They are mediated by the price policy inherent in a certain company, which is expressed in price management techniques and psychological methods of creating adequate price indicators.

The methods of price management include systemsdiscounts, bonuses, savings systems, shares, gifts, discount cards, etc. Psychological techniques are based on the properties of human nature and the knowledge that people often tend to make irrational purchases.

Pricing in trade is mediated a number of factors. First of all, it depends on the market niche occupied by the company. This may be a niche market for perfect competition or the so-called monopolistic market. In the first case, sellers have virtually no effect on prices, so the trading company needs to set prices that are roughly equal to the prices of competitors. On a monopolistic market, the price is almost entirely determined by the monopoly organization.

In addition, it is very important in the process of educationprices take into account the general market situation and all the temporary fluctuations inherent in it. In a situation of stable demand in the market, the mechanism of passive pricing can be successfully applied. The essence of it is reduced to a clear adherence to costly methods of pricing without taking into account consumer preferences and changes in the market. In the situation of a growing market, it is necessary to take into account the mood of consumers. In these conditions, you need to turn to active pricing, adjusting to customers and reacting to market changes. Such a mechanism is characteristic of exchange trade and similar areas that are subject to lively changes in market conditions.

The formation of prices is also affected by the stagelife cycle of the goods sold. For new products, intelligence prices are set. With more stable demand, the price reaches a correspondingly higher level. And in conditions of saturation of the market, prices have to be lowered.

Stages of pricing include several items. The first is the choice of the objectives of the price policy (ensuring survival, holding the market or maximizing profits). Then the level of demand for the goods is analyzed. Only after this, you can proceed to the accounting and analysis of own costs and to study the prices of competitors. The next stage of pricing is the choice of the method of pricing and the transition to the appointment of optimal prices for goods sold.