Market pricing methods are quite diverse. There are many methods for establishing the optimal price for a product. Attracting attention with absolutely everything is almost impossible. Therefore, you can focus only on the most relevant and not problematic for implementation in practice.
Pricing is a dynamic concept. It is impossible to choose a method of pricing once and stick to it for decades. The price is influenced by many factors, which include customer preferences and competitors' policies. For the effective work of the pricing methodology, it is necessary to periodically change, adjust and revise. This is necessary in order not to lose their market position in a competitive environment.
Market pricing methods are determined by the value of the product for customers, the degree of competition, brand attributes and consumer loyalty to it .
Pricing in market conditions depends on the market itself (competitor prices influence when the “race for the leader” or the average market price method is relevant) and on the client (prices depend on demand, customer expectations, value of the goods offered for customers).
Market pricing methods take into account not only the level of demand for goods.
If we consider the approach in which the company, when setting prices for its goods, proceeds only from the fact that the consumer himself evaluates the value of the offered goods, then the main factor here is the consumer perception. With such a system, the consumer gives money for “value”, and not for value. Price sensitivity is flexible, which makes it possible to calculate the optimal price of a product to maximize profits.
Market pricing methods will include a method based on a competitive factor. The decision on the price of goods is determined by the structure of the market. With this method, firms choose a pricing policy slightly lower or slightly higher than competitors' prices. In this context, the most common methods are: the sealed envelope method (tender pricing) and the current price method (standard prices are established for existing similar products on the market).
To set a price based on demand, you need to study and analyze the market in order to know the dependence of prices on demand.
Another method of market pricing is the method of pricing, focused on getting into the balance between market conditions and production costs. In this case, the manufacturer must ensure the price ratio with the products of competitors and other products of his company.
When setting prices, based on the product range, you need to determine the price lines that link the sale of goods in a certain price range. Many types of goods have traditional price scales, to which both manufacturers and consumers adapt over time. When establishing price lines and final prices for goods, one should take into account the possible reaction of consumers to them.
Pricing in the perfect competition market is determined by the fact that in such a market there are many buyers and sellers. Therefore, individual market players are not able to influence the price. The equilibrium of prices in this market is conditionally external. Each seller in such a market is actually a price receiver. The market of perfect competition itself determines the price of goods. And this price is already establishing a balance of supply and demand for goods.
In a competitive environment, price changes must occur promptly. The company should always have in stock a prepared program that will help in a timely manner to take a counter-strategy to the current price situation that arose on the initiative of competitors.