1.Cost methods
Method of full-cost or cost plus method (Full Cost Pricing, Target Pricing, Cost Plus Pricing)
- A way of setting prices based on all costs. By the full cost (fixed and variable) add an amount corresponding to the margin.
P = C / C * (1 + R/100)
The method of direct costs (Direct Costing System)
Implies an increase in variable costs per unit of output in the percentage of covering costs and providing a sufficient rate of return. Provides better opportunities pricing: full coverage of fixed costs and maximize profits
Method <target profit>
The method of calculating the price based on an analysis of breakeven and profit target based on the fact that the company seeks to establish a price for their goods at a level that would obtain the desired level of profit.
2.Market methods
Method of perceived value
In economics, value - the total savings or pleasure derived by the buyer as a result of consumption (use) of goods purchased, i.e. is the benefit that is good it brings. In marketing, the perceived value - score desirability benefits, which - in terms of money - more than the value of this benefit. The basis of measurement of the ratio is useful and prices for goods that are reasonably available alternatives to customers.
Method of the perceived value is based on the analysis of qualitative and quantitative characteristics of the goods, or the economic effect obtained during the use of consumer goods (primarily capital goods).
Determination of prices based on demand
The method is applied to goods of mass demand with high price elasticity of demand. Finds the greatest practical application in determining the price of a new product, which has no (or very little, as in the case of oligopoly) goods competitors.
The method of the average market price
Involves the sale of goods calculated on the basis of competitive data called the average market price.
The method of "race for leader" requires cost-based prices leading competitor in the light of the competitive situation in the market, product differentiation and quality. The company actually abandons active price policy, focusing on the leading price.
Tender method
method of pricing based on open bidding. Used in industries where several companies are serious competition for certain contracts. In determining the tender come primarily from the price, which may appoint competitors, and the price is determined at a lower level compared to them.
