Second Market Discount Strategy
Posted: Wed Jan 22, 2025 7:05 am
The formation of a pricing strategy is based on the characteristics of fixed and variable costs.
Let's consider its action on a specific example. The company sells 90 units of products for 19,000 rubles per item. Fixed costs are equal to 2,900 rubles per 180 units of the product. Variable costs are 6,500 rubles. In the current period, the company has planned to enter a new sales market. An important task in achieving this goal is to fully maintain its positions in the old segment. At the same time, the production capabilities of the company allow increasing output by 180 units.
When entering a new market, the revenue is provided by a selling price that is higher than the company's variable costs. That is, the cost of the product in the new segment should be higher than 6,500 rubles. It turns out that the old market takes on fixed costs and thus frees up a certain savings for the uncaptured one - that is, the enterprise has the opportunity to set a minimum selling price there.
Discount strategy
Factors influencing the facebook database choice of pricing strategy
In order to correctly select a pricing strategy that will ensure the company achieves its goals in the current market conditions and at the current level of competition, it is necessary to take into account the following factors:
Cost of production. It consists of fixed costs, always stable, and variable costs, which change depending on the current production volume. Demand directly depends on the selling price of a unit of production and, in turn, affects the output figure.
The chosen policy for positioning. It is based on how accurately you have studied your target audience, segmented it by interests and requests, solvency and readiness to make purchases here and now or in a deferred period. Positioning is built for a specific segment of your potential clients.
The company's goals. The choice of a specific pricing strategy depends on how correctly they are defined: the pricing policy when developing a new sales market and when increasing sales volumes can differ greatly.
Rival firms. Competitive analysis is a critical factor in planning any business process in a company. It is important to understand the current level of rivalry in the market in order to anticipate and minimize the possible response of rival firms in the industry to your actions in the market.
The elasticity of consumer demand shows in quantitative terms how the number of potential customers willing to purchase your product will change as its price increases.
Current economic conditions. It is important to consider the state of the global, national, regional market, the presence of a crisis, as well as existing external business and political restrictions, since all this directly affects the level of demand of potential consumers, their purchasing power and the level of real income that they are willing to spend on the purchase of a particular product.
Break-even point, profitability rate. These are very important indicators that need to be taken into account: they determine the minimum cost of selling a unit of production that will fully cover all costs of its production and sale.
It is necessary to review current and select new pricing strategies when:
new products appear on the market;
the life cycle of existing products is coming to an end;
a sharp transformation of the competitive environment is taking place;
prices for products sold on the market change;
the costs of producing goods are increasing.
Let's consider its action on a specific example. The company sells 90 units of products for 19,000 rubles per item. Fixed costs are equal to 2,900 rubles per 180 units of the product. Variable costs are 6,500 rubles. In the current period, the company has planned to enter a new sales market. An important task in achieving this goal is to fully maintain its positions in the old segment. At the same time, the production capabilities of the company allow increasing output by 180 units.
When entering a new market, the revenue is provided by a selling price that is higher than the company's variable costs. That is, the cost of the product in the new segment should be higher than 6,500 rubles. It turns out that the old market takes on fixed costs and thus frees up a certain savings for the uncaptured one - that is, the enterprise has the opportunity to set a minimum selling price there.
Discount strategy
Factors influencing the facebook database choice of pricing strategy
In order to correctly select a pricing strategy that will ensure the company achieves its goals in the current market conditions and at the current level of competition, it is necessary to take into account the following factors:
Cost of production. It consists of fixed costs, always stable, and variable costs, which change depending on the current production volume. Demand directly depends on the selling price of a unit of production and, in turn, affects the output figure.
The chosen policy for positioning. It is based on how accurately you have studied your target audience, segmented it by interests and requests, solvency and readiness to make purchases here and now or in a deferred period. Positioning is built for a specific segment of your potential clients.
The company's goals. The choice of a specific pricing strategy depends on how correctly they are defined: the pricing policy when developing a new sales market and when increasing sales volumes can differ greatly.
Rival firms. Competitive analysis is a critical factor in planning any business process in a company. It is important to understand the current level of rivalry in the market in order to anticipate and minimize the possible response of rival firms in the industry to your actions in the market.
The elasticity of consumer demand shows in quantitative terms how the number of potential customers willing to purchase your product will change as its price increases.
Current economic conditions. It is important to consider the state of the global, national, regional market, the presence of a crisis, as well as existing external business and political restrictions, since all this directly affects the level of demand of potential consumers, their purchasing power and the level of real income that they are willing to spend on the purchase of a particular product.
Break-even point, profitability rate. These are very important indicators that need to be taken into account: they determine the minimum cost of selling a unit of production that will fully cover all costs of its production and sale.
It is necessary to review current and select new pricing strategies when:
new products appear on the market;
the life cycle of existing products is coming to an end;
a sharp transformation of the competitive environment is taking place;
prices for products sold on the market change;
the costs of producing goods are increasing.