Abstract

Research topicality. Cost is an indispensable part of innovational product. Otherwise stated, it's market estimated consumer cost. Peculiarity of innovational product consumer cost defines the product's cost and method of pricing. In accordance with cost theory the value of product cost should be defined by social time necessary for its creation.

The complexity of innovational product pricing is caused by the fact that its objects are both material and ideal substances, which are not taken into account by labour theory of cost limited to material production.

National and foreign publications give a detailed analysis of the problems related to the pricing of innovational products. A given problem has been investigated by many scholars who put forward a variety of theories in relation to the pricing of innovations. However, no optimum strategy of pricing has been found so far due to the fact that one is not only to take into account such factors as consumer demand, material and labour costs but also to rely on the luck.

Research demonstrated that company's effective performance depends largely on effective price management of innovational products. Therefore, it is essential to develop existing methods and principles of management of innovations aimed at strengthening company's market share.

Definition and further investigation of these problems predetermine topicality and novelty of the research under consideration.

Important condition undermining demand for innovational product is a demand for modern equipment instead of out-of-date which reached the limit of its productive capacity. Economic recession or changes in capital maximum effectiveness, which reduce the cost of investments into stagnating areas, encourage demand for technological innovations. Another sinequanone creating demand for scientific and technological innovations exists resource limits. Technology sets existing natural resources defining not only effectiveness of their use but also ability to find, extract, spread and conserve them. Therefore, there is a demand for resource conservation waste free technologies.

Problem of national products compatibility can't be solved without forming market of innovations and innovational technologies despite considerable capacity of big industrial enterprises, production growth and state stimulation of demand maintained by increase of social donations and special market privileges.

Previous study of the problem . Definition of the [problem and creation of methodological basis for innovational products pricing is closely connected with the names of national and foreign experts. Pricing policy of any company is an important element of its compatibility. That is why study of pricing has to be included in the curriculum of the future economists. The following scholars have contributed greatly to the research and development f a given problem: F. Binshtock, P.Kotler, E.Utkin, T.Sakaya, Pilzer, V.Gerasimenko, A. Kazanzev, A.Marshal, R.Fathutdinov, D.Kokurin, I.Salimzhanova, R.Macconnell Campbell, Bru Stenley, P.Zavlin, B.Santo, P.Drucker and others.

Given scholars have made considerable contribution and formed the basis for further investigation of innovations and innovational products pricing. However, problems related to formation, development and improvement of innovational products pricing have not been properly studied yet. The fact mentioned above influenced the choice of the topic and objectives of a given paper.

Master paper objective is to develop system of management of innovational products pricing on the basis of particular enterprise analysis.

Innovational product as a commodity is to satisfy social demand by means of transferring its cost on a produced virtue forming, therefore, its consumer cost. The use of innovational products guarantees reduction of article cost. Thus, innovational product cost can be defined only when products manufactured on their basis will be approved and recognized on the market.

In order to achieve mentioned above objective we are supposed to consider and solve the following tasks:

• Consider and define the essence of such phenomena as: "Price", "Pricing", "Innovational product";
• Study essence and problems related to pricing of innovational products in Ukraine;
• Identify the structure of expenses necessary for innovational product;
• Consider peculiarities of price formation of innovational products in Ukraine;
• Determine and structure management tasks for innovational products pricing;
• Study peculiarities of pricing decisions;
• Analyze existing resources for innovational processes informational provision;
• Study risks;
• Work out recommendations for improvement of innovational products pricing.

Research object: industrial enterprises of Ukraine.

Research subject: : theoretic and methodological features of innovational products pricing in industrial enterprises of Ukraine.

Theoretic and methodological basis for a given diploma paper is formed by: concrete scientific methodology represented in works of scholars specializing in economic theory, economic analysis, theory of management, price formation, organizational theory, economy of enterprise, organization of innovation, organization of investment processes etc. Moreover, paper under consideration is based on fundamental methodology formed by the following principles: principle of dialectics - reflects interrelated and controversial development of events, principle of determinism based on objective conditioning of events, principle of isomorphism characterizing relation between objects. We also resorted to general scientific methodology consisting of historical, terminological, system, cognitive and model principles.

In order to achieve objectives under consideration it is suggested to use methods of system, statistic and economic analysis.

Master thesis consists of introduction, three parts, conclusion and list of references and appendixes.

Introduction gives general characteristics of the paper such as justification of problem topicality, definition of research tasks and objectives, explanation of the research novelty and practical significance. It also presents results of approbation and implementation of key ideas.

Diploma thesis consists of three parts:

Part I "Theoretical basis of price formation" considers types of prices and their functions. Basic price functions are accountable, distributive, regulating and stimulating. Pricing - price formation for goods and services. There are two typical systems of price formation; market functioning on the basis of supply and demand interaction and centralized state price formation carried out by state authorities. Moreover, price formation is based on production costs and turnover. For payments to external counteragents companies basically use two types of prices: public and rated ones. Theoretical part of the diploma paper also considers systems of price formation and their objectives.

There are 6 stages in the system of price formation:

1. definition of pricing policy aims;
2. definition of demand for company's products;
3. evaluation of expenses;
4. analysis of competitors' goods and prices;
5. setting ultimate price;
6. consideration of state regulation of prices.

There are basically several stages in the system of price formation. The first stage is definition of pricing policy aims. Enterprises try to answer the question: what are we willing to achieve with the help of our pricing policy? There are usually several objectives. They are as follows: strengthening company's position on the market, profit maximization, increase of turnover and sales and achieving excellent results due to high prices and premium quality.

These objectives are closely interrelated, though they don't always coincide.

The second stage is definition of demand for company's products. Otherwise stated, estimation of products, which can be sold at different prices. It's necessary to be able to see the way potential volume of sales depends on level of prices. It's important to carry out complex analysis of the way demand reacts to different prices for a particular product. The less changing demand is the higher the price may be for this product.

The third stage of market price formation is expenses evaluation. Evaluation of expenses and finding the ways of their reduction is a must for every entrepreneur. We traditionally differentiate between two types of expenses: permanent and changeable. Changeable expenses are those whose value depends on usual fluctuations of overall production and turnover. Changeable expenses directly depend on overall output. These are expenses on raw materials and salaries. The total of permanent and changeable expenses - total expenses - build up the lowest price limit.

Analysis of competitors' prices and goods is one of the most difficult tasks. Information about prices in particular deals is considered commercial secret in most cases and, therefore, it's extremely challenging to get such information. Analysis of competitors' products and prices is aimed at the following: determination of the so-called "price of indifference" (it doesn't matter for a customer whose product to buy). Determination of such a price will help to surpass this indifference and make customer choose your product.

Having analyzed competitors' products and prices it's possible to move on to the next stage of price formation - the choice of permanent pricing method. There are several most spread methods within practice of market price formation:

• method of expenditure;
• method of following the competitor;
• method of expenditure and marketing;

Stage of ultimate product pricing is carried out in the process of real life negotiations with customers. There are two tasks to be solved at this stage: creation of discount scheme for customers and definition of price correction mechanism taking into account product's life cycle and inflation processes. Choosing one of the methods it is necessary to take pricing decision itself and define the price. Here you need to take into account a wide range of aspects such as psychological influence, impact of various marketing elements, complying with basic aims of pricing policy and analysis of potential reaction to a given price. The role of psychological influence can be explained by the fact that for many customers it is one of the parameters of the product quality. Prices, which create image, are typical of the product affecting customers conscientiousness. Customer may prefer a more expensive article if he/she considers it more attractive and prestigious.

Final stage of price formation - taking into account state regulation of prices. In most countries of the world there are many various ways of state limitation and regulation of prices and their dynamics. Considering problems of company products pricing it is essential to evaluate the effect state regulation can have on the company performance. Providing company is going to export its virtues, it will have to get data about patent purity of the products in the countries-recipients.

The second part of a given thesis "Prices for innovational products" looks into economic content of innovation product, dynamic systems of prices for promoting innovation on the market and planning of price and total output of anew product.

There is difference between structure of expenditures for innovational product and that for majority of goods and services. Special feature of innovational product is the fact that you can't identify total expenditures on the final stage of the product manufacturing by evaluation intellectual property costs. At one and the same time cost of the innovational product doesn't always equal production costs. There are following peculiarities of the innovational product: considerable compatibility and sensitivity to scientific and technical novelties, specifics of pricing and dependence on unstable consumer demands.

Promoting new product on the market presupposes special pricing policy. Regarding pricing policy (taking into account planned total output at a definite price as a parameter) we can single out the following basic alternatives. One of the most spread is the so-called umbrella type of price formation. The second type of the pricing policy is the one based on fixed patent protection of innovations (capital-intensive patenting of technical novelty of the product). The third type is when innovational monopoly is not used for achieving monopoly surplus profit, but for strengthening customer loyalty and formation of one of the intangible assets of any company loyal clientele (goodwill's most important element). This asset can be evaluated by means of capitalization of its surplus profits.

Phillip Cotler, expert in market mechanisms, was involved in analyzing dynamic price systems. Strategy for new products pricing has number of peculiarities. We are to distinguish between real novelty and product, which is just imitating it. Pricing really new product protected by a paten has several strategies: "skimming the cream" (launching the product at relatively high price exceeding the price guaranteeing optimum profit in standard market conditions with its further reduction); strategy of penetrating the market (launching the product at relatively low price with potential for further increase); loss leader strategy (extremely low prices for entering the market, even lower than those used in strategy of penetrating the market).

There are following strategies for setting prices for a new product-imitator: strategy of premium extra charges, strategy of deep penetration to the market, strategy of inflated price value, strategy of inflated price, strategy of middle market, strategy of good quality, strategy of robbery, strategy of illustrative business and that of low price value.

Enterprises have to project and develop manufacturing of the products, which doesn't replace existing well-developed ones but expands existing parametric range of products.

There are several methods for new products pricing depending on its level of consumer features with regard to expenses per parameter unit. These parameters are called econometric. They are as follows:

• method of specific indices;
• method of regression analysis;
• point method.

Common disadvantage of all three methods is assumption that price depends only on product features. They don't take into account the fact that competing companies set their prices not only on the basis of quality features but can increase or decrease the price according to their pricing policy.

The third part of a given thesis "Identification of optimum price for innovational products" considers peculiarities of market of innovations together with analysis of formulas, which can be used for innovational products pricing. Basic ways of new products promotion from the point of view of their target audience are: changing the product, expanding the products range, creating new product range, products representing world novelties and creating new markets.

Basic methods of price formation are as follows:

• "skimming the cream";
• "penetrating the market";
• evaluation of the consumer cost;
• achieving target revenue;
• method of the quick pay back.

Methods of innovational product price formation can be virtually divided into two groups:

• cost approach (prices are set with regard to their cost and return rates);
• with regard to general practicality of the innovation.

When setting the price it's important to take into account potential reaction of basic target groups. It's closely connected with customers' expectations and manufacturer reputation. Consumer is more likely to buy more expensive product of a brand with good reputation. However, you had better avoid the so-called reputation of surplus profit even having a good reputation. It can encourage consumer to place the order with the company offering more favourable conditions.

Setting the ultimate price for a product it 's essential to bear in mind the fact that you have to take into account the situation on the market and enterprise general strategy.

Previous experience demonstrated that ultimate price is to be defined by top marketing, sale and financial managers. They have their own perceptions of the price level and as a rule have long discussions before they reach a common ground.

Conclusion represents basic outcomes of the research, systematizes conclusions and justifies research objectives from the point of their achievement.

Main factor to be taken into account when setting price is studying competitors' prices. Existing and potential competitors always try to evaluate structure of prices and production profitability. Existing competitors will try to offer similar or better products, whereas potential competitors will consider entering the market if they find potential profit high enough.

Price is the most significant constituent part of compatibility; therefore, its changes are very explicit and cause feedback. Changes of other elements are less obvious and are more difficult to identify in order to take measures.

Setting prices for new products and services the most important thing is transparency of the prices (they should be easy to understand). This way customer will make sure that price reflects real value. As a result it will enhance customer loyalty. Active company policy decreases customer indecision in terms of new product or service and motivates their trust.