INFORMATION
In the pricing process presented, the information from the Company regarding Policies, Objectives and Strategies must be initially collected.
pricing-model-1PRODUCT DEFINITION
Then, an exhaustive definition of the products that are manufactured and marketed is carried out, highlighting all their qualities and the quantities of the components necessary for their manufacture, as well as the benefits that the consumer expects to obtain from it. Finally, the model requires information regarding the competition regarding the size of the competitor, the prices of its products and discounts to the distribution channel.
DEMAND STUDY
The Study of Demand allows obtaining the Price Elasticity of Demand and the Market Segmentation procedure is used later in the case of the establishment of price differentials. The last procedure that is presented is the Enhanced Value Analysis that allows to quantify what are the benefits that the consumer gives to the product and what is the valuation that arises as a result of these.
COMPETITION ANALYSIS
Types of products: competitors, substitutes.
Market structure: Leader, Market type, typical characteristics.
Price strategies present in the market.
Maximum and minimum price levels for each product.
PRICE AND MARKET MIX.
Balance of the product mix: Establishment of maximum and minimum prices and establishment of price differentials.
Prices of the distribution channel: Characteristics of the distribution chain and estimation of the margins in each link.
Prices and promotion: Considerations of the different authors to publicize the determined price levels.
DEFINITION OF ELASTICITY
- When a company decreases the price of its products, it assumes that the quantities demanded will increase Consumers' sensitivity to variations in the determinants of demand. (Product prices, prices of other products, consumer tastes).
CHANNEL MARGIN
Distribution channels:
- The distribution channel is constituted by a group of interrelated intermediaries who deliver the products and services of the manufacturers to the consumers and end users. The type and size of the channel depend on the product to be distributed
MARKET SEGMENTATION
It means dividing the Market into more or less homogeneous groups of consumers, in their degree of intensity of need.
More specific we can say that it is the division of the market into diverse groups of consumers with different needs, characteristics or behaviors, which could require different products or marketing mixes.
IMPROVED VALUE
- There is a need to constantly improve the products and services that are produced to remain competitive. Innovation is a basic need in everything that is done. Value analysis or value engineering provides a convenient way to organize innovation, focused on improving the value of products and services. Value analysis is a philosophy that seeks to eliminate everything that causes costs and does not contribute to value nor to the function of the product or service. Their goal is to meet product performance requirements and customer needs at the lowest possible cost. Value analysis is also an organized approach to analyzing products and services where various stages and techniques are routinely used.
SALES PRICE TO THE CHANNEL
These are determined based on the information on price margins to the distribution channel from the competition and the policies and strategies that the company has drawn up for the period considered.
MINIMAL PRICE
Based directly on the cost estimate, the minimum price equals the unit variable cost, and indicates that under certain
In circumstances, it is possible to sell at a price such that it allows to recover the "factors used directly in production and marks the limit below which the company is not interested in bidding except for exceptional causes.
The reason for selling in a certain period or accepting an order from the company is “to satisfy the need for
retain a skilled workforce in periods of inactivity as insurance for periods of high activity ”.
MAXIMUM ACCEPTABLE PRICE
This is defined as «the price that makes the consumer ignore the economic difference between the new product and the
reference product '. This price is based on the analysis of the profit potential that you can expect from the consumer of a certain product.
COMPETITION PRICES:
This is a price range that allows the company to determine the level above which sales are difficult or impossible and in
the case of the lower limit to determine the possible emergence of an opportunity produced by low operating costs.
VAT
When setting prices, the exemption regime presented in the Value Added Tax Law (VAT) must be taken into account since there are substitute products for the company, which may be exempt from VAT, which represents a difference in the final price paid by the consumer, which is 10% in the border regions and 15% for the rest of the country, representing a potential threat to the company.
BALANCE MIX
The initial setting of prices includes the balance of the product line through which it is sought to find the right price range acceptable to the buyer and thereby stimulate the purchase. As a product of this process, we have the Price List.
STRATEGIES
Strategy to penetrate the market: a low price is set, in order to attract as many buyers as possible and thus achieve a significant market share. By having, then, a high volume of sales, the costs, therefore, will be lower, which may allow the price to be lowered even further.
DIFFERENTIAL OR FLEXIBLE PRICES:
This price consists of the practice of charging different prices according to the clients' willingness to pay.
The ability to use differential pricing tactics depends on a market being susceptible to segmentation on the basis of price, low possibility of resale or reassignment of one service to another, and minimal customer resentment towards the practice.
These prices seem to constitute one of the most common practices in the services sector, being called the "agreed price".
Some problems that can arise when using spreads are that customers may delay their purchases waiting for spreads to be used or they may expect discounts as a regular feature of a service offering. Because of these issues, some service organizations prefer to use uniform pricing practice, charging all customers the same price regardless of time, location, or ability to pay.
INSTITUTO TECNOL TGICO DE TUXTLA GUTIERREZ
TEAM MEMBERS:
ALEJANDRA PÁRAMO HERNANDEZ
IDANIA ELEN BLANCO MONTERROSA
LUIS ARTURO PEÑA GARCIA
MARTHA CECILIA MACAL MOLINA
CARLOS IVAN GOMEZ ALBORES
ROBERT ADER DE DIOS SANTIAGO
TUXTLA GUTIERREZ CHIAPAS
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