It is known that cost of performance of design works to estimate difficult enough. The purpose of present article is carrying out of classification of methods of pricing to certain signs on the basis of researches of the Russian and foreign scientists . Статьи
The complex analysis of influence of the various facts on a price level and a choice of an optimum method of pricing provide profit increase.
The decisions accepted by a management of engineering firm in the field of pricing, concern the most difficult and responsible as they are capable to worsen not simply indicators of design activity, but also to lead the design organisation to bankruptcy. Besides price decisions can have long-term consequences for customers, dealers, competitors, many of which are difficult for expecting and, accordingly, operatively to prevent undesirable tendencies after their display.
It is especially actual in present Russian conditions when owing to decrease in consumer ability and an increasing competition in the market for successful activity of the enterprise the greatest value gets a choice of an effective method of pricing.
In the economic literature enough considerable quantity of methods of the pricing applied both foreign, and the Russian enterprises in practice is described.
Let's consider classification signs of methods of pricing.
All methods of pricing can be divided into three basic groups, depending on that, on what the firm-manufacturer or the seller in a greater degree is guided at a choice of this or that method:
1) on production costs – costly methods;
2) on market condition – market methods;
3) on specifications of expenses for technical and economic parametre of production – parametrical methods.
In turn the group of market methods of pricing can be divided for two subgroups depending on:
1) relations of the consumer to the goods – methods with orientation to the consumer;
2) a competitive situation in the market – methods with orientation to competitors.
The subgroup of methods with orientation to the consumer also includes a number of methods which can be classified on:
1) perceived value of the goods the consumer – methods on the basis of perceived value of the goods;
2) to the developed demand in the market – methods with orientation to demand.
Further the methods of pricing entering into each of groups and subgroups, proceeding from offered above classification are in more details considered; their advantages and lacks, and also possibilities of application of this or that method in changing market conditions are described.
The most widespread methods of pricing now are: the costly pricing accepting as a starting point actually expenses (costs) of the organisation on manufacture, realisation and service post-support; following for the competitor, that is use of strategy and tactics of pricing of most successfully working competitors; methods with orientation to demand (including the valuable pricing providing reception of profit at the expense of achievement of an optimum parity “value/expense”).
Let's consider the methods based on costs.
The most popular in the majority of the commercial organisations till now is a costly method on which the modern domestic legislation is focused also. Popularity principal causes:
- the binding of the price to expenses for service manufacture simplifies the problem decision (all necessary data for price calculation is present in the company);
- at use of the given method by the companies of any branch of their price appear similar (similar or conterminous chains of deliveries), and a competition thereof is reduced to a minimum;
- the given method is more fair in relation to the buyer of service (the method concerns to “intuitively clear” at household level: “I have spent for you under your request so much, return me money”).
At the heart of a method accounts of costs and an establishment of such prices for services which would provide a recoupment of costs and standard level of profitableness lie. As costs full, partial and capital expenses can be considered.
As the basic advantages costly methods the guaranteed level of profitableness and simplicity are usually considered. Nevertheless simplicity here – concept rather conditional as methods assume presence of the authentic and full information on the costs having on unit of service. Real-life for today the system of book keeping of such information does not give. To receive it, it is necessary to adjust system of the administrative account. Besides, it is difficult enough to define the adequate carrier of unit of the price and cost of design work.
One of alternatives costly method to a method is the system “direkt-costing”. Its essence consists that the cost price is considered and planned only regarding variable expenses, that is on carriers of expenses only variable costs are distributed. The rest of costs (constant expenses) reflect in book keeping in the separate account, in accounting do not include and in the end of the accounting period (as period expenses) write off on financial results, that is consider at calculation of profit and losses for the accounting period. On variable expenses in the conditions of this system stocks – the warehouse rests and a work in progress are estimated also.
“Direkt-costin” allows to receive and generalise the information useful to acceptance by managers and the top management of the organisation, performing design works, correct administrative decisions. It is possible to carry to their number:
- decision-making on directions of development of business;
- definition of a minimum quantity of the services necessary for break-even work of the design organisation;
- an estimation of influence of quantity of the executed design works and other services on profit;
- an estimation of losses of the organisation performing design works, at incomplete loading of its experts-designers;
- decision-making on expediency of the conclusion of different barter transactions (for example, about expediency and profitableness of carrying out of an advertising campaign instead of the rendered services);
- an estimation of efficiency of investment projects.
Let's consider methods with orientation to competitors.
The design organisation can choose the prices of competitors as a starting point for pricing. Really, having received the information on the prices of competitors, the organisation performing design works, makes decision, whether to establish to it of the price above, more low or at the same level.
Methods of an establishment of the price with orientation to competitors can be subdivided on:
1) a following method behind market prices;
2) a following method behind the firm-leader prices in the market;
3) a method of definition of the price on the basis of habitual, accepted in practice of the given market of the prices;
4) a method of definition of the prestigious prices;
5) a adversary method.
The given group of methods allows to leave from a price competition. Besides, these methods as a matter of fact are simple enough. Negative sides: the various companies can have different costs, and those prices which allow one company to prosper, can result another in bankruptcy. The size of costs depends and on the size of the company, and from set of other individual factors.
So, the large companies achieve decrease in costs at the expense of the centralised purchase of account materials and CAD in large lots, the small companies can have advantage at the expense of smaller quantity of the personnel and the smaller premises demanding smaller expenses on rent and the maintenance. The information on expenses has especially internal character, and the companies do everything that it has not come into the hands of competitors.
Being guided by the price of competitors, the company cannot consider not price distinctions. Even more problematic is use of these methods when the price does not reflect value of the goods/services for the customer.
Let's consider methods with orientation to demand.
These methods of road also are difficult. Enough qualified personnel is necessary for their application, but they allow to consider absence of the referential prices at consumers and their sensitivity to not price factors.
The method of an establishment of the prices concerns the given group on the basis of the general forecast of a sales volume at the set prices. Its use assumes possibility of definition of sales volumes at the set price levels by means of marketing researches and revealing of that price level which will allow the company to get the greatest profit and to reach the marketing purposes.
The second method is a method of an establishment of the prices on the basis of perceived value of the goods. For its application it is necessary to consider that value is perceived by different people differently because of distinction in their internal values and tastes, knowledge of service, a financial position. There are four major importances of perceived value:
1. “value is a low price”
2. “value is a quality which I receive for money which I cry”
3. “value – performance of all my requirements concerning service”
4. “value is that I receive that I cry”
Depending on value gets what value for target consumers of the company, various variants of complex model of the perceived price, quality and value are used. Key concept of this scheme is perceived value – an estimation the consumer of utility of the concrete service, based on an estimation of benefits from reception of service and that, than it is necessary to offer for reception of the given service.
The algorithm of definition of value for the consumer consists of following steps:
- gathering of the information that is of value for customers;
- the help to customers in expression of that represents for them value, by means of gathering of definitions of value given by them, key abstract benefits, quality units of measure;
- revealings of the internal and external attributes render on perception of value of service and their communication with attributes which they reflect. For example, transfer of widespread abstraction “turnkey” in real standards of rendering of service, applicable in practice (for example, to designing it can be the complete set of offers on design, assembly, starting-up and adjustment and to repair work);
- transfer monetary and not monetary value in a quantitative plane;
- definition of the price on the basis of value for the customer.
To translate value perceived by consumers in term of money, it is necessary to answer these questions:
- what advantages are given by service to the customer in that kind in what its our company represents;
- how much important each of these advantages to the customer;
- in what sum to the customer each advantage (in money terms) will manage;
- what price is economically comprehensible.
Depending on what value accepts value for target audience, are considered all or separate elements of complex model of the perceived price, quality and value.
Methods of pricing of the concrete company depend, first of all, on the purposes which it puts before herself. Such purposes can be:
- survival maintenance;
- profit maximisation;
- a leadership gain in the market;
- a leadership gain on indicators of quality of services and service level;
- research of additional means for development of the organisation and material stimulation of workers;
- Maintenance of availability of services offered by the company for various strata of society.
Let's result an expert estimation of change of the prices on CAD in 2010.
As known journalist Ralf Grabovski considers, the prices on CAD in 2010 remain static. During good times vendors all ways the price rise, and very reluctantly lower the prices during bad times.
During bad times: this year Vendors do not dare to raise the price not to lose a sales volume, and simultaneously are afraid to lower the prices not to lose the income.
During good times: CAD-vendors the price rise, letting out for the additional price of expansion, entering obligatory subscriptions and extending sets of products (bundle). For example, Autodesk plans to increase release of such sets: totally they are more expensive to clients, they lead more to number of the sold workplaces, however their total cost appears more low.
The Low prices: Such companies as Alibre cannot long keep the price at such low level as $99, and service and foreign sales to receive additional incomes rely on growth of number of sales.
The low prices cannot be kept long time because of licence deductions; also, developers of appendices experience difficulties when their product costs more expensively, than base.
The High prices: For expensive (above $8001) CAD there is only narrow market which is confidently grasped by companies Dassault Systemes, PTC and Siemens PLM Software together with their distributors.
The Ideal prices: It seems that Autodesk with the price in $1200 on AutoCAD LT has found an optimum that is proved by triple annual growth of sales of this product in comparison with sales AutoCAD, despite considerable limitation of functionality. In 2009 Autodesk has essentially risen the price on LT, but uses it as a transitive step to more expensive systems: for example, having paid in addition $2000, you can receive Inventor.
From experience with AutoCAD LT it is possible to take following lessons:
- It is compatible to other programs from Autodesk and, therefore, can be used for initial plotting, entering of corrections, viewing of files.
- It costs only to the little above, than a package of office programs;
- Its possibilities of plotting are sufficient for the majority of users;
- It does not need to give to programming possibility as they are not necessary to the majority of users (it is necessary to notice that there are possibilities of the elementary programming – creations by users of macroes and addition of their performance in created points of the menu);
- At last, it enjoys advantages of well distinguished brand – AutoCAD.
It is necessary to notice what to gain money it is possible and on free of charge extended CAD. It is interesting that free CAD are not so popular. The majority vendors has free versions, the number of their loadings is measured in tens thousand, but never in millions. SketchUp could be an exception, but Google does not inform number of loadings, and it not CAD.
In practice, considers Ralf Grabovski, clients have a psychological requirement to pay for CAD more than traditionally there are office systems as higher price assumes the big stability, accuracy, safety.
Thus, maximisation of current profit is provided with the system approach by an operative and objective estimation of all tendencies of a supply and demand.
1. Yanchenko V. Elitarium. The analysis of methods of pricing. – 2008 [http://www.elitarium.ru/2008/12/03/analiz_metodov_cenoobrazovanija.html]
2. Kryuchkovа O.N., Popov E.V. Classification of methods of pricing//Marketing in Russia and abroad. – 2002. – #4 [http://www.dis.ru/library/market/archive/2002/4/48.html]
3. Grabovski R. Statement by Ralf Grabowski Round Table “Future of CAD”//isicad. – 2009 [http://isicad.ru/ru/articles.php?article_num=13277]
The author: Челябэнергопроект
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