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Authors : 1. Viktor V. Shnaider,
PhD (Economics)
Togliatti branch of the Russian State University for Humanities, Togliatti, Russia
2. Lyudmila A. Korosteleva,
Post-graduate student of the Chair of Accounting and Audit
Academy of Finance and Technology, Korolev, Russia
Theoretical aspects of the price-forming mechanism under modern business conditions
Objective: to the oretically ground the price-forming process under competition; to reveal the main faults of the price-forming process; to define the balance between the price policy of a trading enterprise and the quality, demand and average price for analogs.
Methods: logical and comparative research methods.
Results: the research is based on the fact that the price set for the product has both the internal and external value. The complexity of economic processes and the price-forming mechanism determines the fact that the time influences costs greatly, due to the changes in the level of costs determined by technologies improving, which leads to the cost reduction, and inflation of costs, leading to their growth. The article reveals the widely used principles of price forming – the price competitive strategy, the price damping strategy, and the price forming by “Prime cost plus profit” method.
Scientific novelty: the main faults of the price-forming process are grouped, including: setting the price according to the market price, without calculating the true value of the product or service; the same profit margin for all products and services; ungrounded reduction of price; setting the same prices for all clients; wasting time for inefficient clients; setting the income, not profit as the objective of sales. In our opinion, due to the economic processes volatility, i.e. reductions and growths of consumer demand, the trading enterprises should pay more attention to maintaining the profitability of particular clients and operation, taking into account the changing demand of consumers and their sensibility to prices, as well as to develop better understanding of micro-economic factors influencing the sector and the counteragents’ business. We define the character of the fair price as the second order factor, i.e. the pricing policy of a trading enterprise should be oriented towards quality, demand and average price for analogs.
Practical value: the proposed pricing mechanisms are aimed at price policy optimization and, consequently, profit increase. Though the observance of the proposed price-forming stages does not guarantee against losses, it can help avoid certain mistakes under the unstable market conditions.
Keywords :
Price-forming; Market economy; Optimization; Formation; Business; Price-forming principles; Mechanism; Risk; Goods prime cost; Price damping
Bibliography :
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5. Kehrer, D. The 6 Biggest Pricing Mistakes to Avoid, available at: http://www.business.com/business-planning/6-biggest-pricing-mistakes-avoid (accessed: 21.08.2014)
6. Marn, M.V., Moss, S.C., Eyink, Ch. N. Ценообразование во время кризиса (Price-forming during crisis). The McKinsey quarterly, available at: http://www.cfin.ru/anticrisis/methodical_material/consultantsl (accessed: 21.08.2014)
Citation :
Shnaider V.V., Korosteleva L.A. Theoretical aspects of the price-forming mechanism under modern business
conditions, Actual Problems of Economics and Law, 2014, No. 4 (32), pp. 190–195.
Type of article : The scientific article
Date of receipt of the article :
22.09.2014
Date of adoption of the print :
23.11.2014
Date of online accommodation :
20.12.2014
