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Olga Gordienko

Faculty economy

Department Economy of enterprise

Speciality Economy of enterprise

Improved pricing of innovative products

Scientific adviser: Candidate of Economic Science Evgeniya Zarichanskaya

Resume Abstract

Abstract

• Introduction
• 1. Scientific-theoretical basis of pricing
• 2. Methodical bases of pricing of innovative products
• 3. Guidelines regarding the improvement of pricing or innovative products
• Conclusion
• References
• Note

Introduction

Rationale of the issue

In a competitive, dynamic economy important requirement is to ensure the growth of productivity and efficiency to solve the problem of quality of domestic products due to new approaches to this problem, including roses earnings models of transition to a higher level of quality. As the complexity of technological systems, more and more difficult to control processes occurring in them, as to trace all the features of the company, conduct research system for all possible external influences and deviations of the values of the internal parameters becomes impossible. By the way, in the work (Zhang VB synergetic economics. Time and changes in the economic theory of nonlinear / Per. From English. – M.: Mir, 1999. – P. 355.) the conclusion is that the process of technological change characteristic of uncertainty. Technological change is characterized by innovation, that is, the change in the production function.

An integral party of an innovative product as a commodity, is the cost. Specificity of value in product innovation affects the determination of its cost and the method of pricing. According to the theory of value, the value of value of goods shall be determined by the socially necessary time of its creation. The complexity of pricing for product innovation is the fact that its objects are not only material but also ideal substance that can not find a full materialization and do not reflect the cost as part of the labor theory of value and limited to industrial production [1].

The aim and tasks for the research work

Objective is to find the most effective method of pricing for products iinovatsionnuyu

The main tasks:                           
–rassmotret and determine the nature and content of the concepts of price, pricing, innovative products;                           
–issledovat essence and problems of pricing of innovative products the enterprises of Ukraine;                           
–to identify the structure of the costs of product innovation;                           
–rassmotret features pricing of innovative products in Ukraine;                           
–vydelit and structure the management tasks pricing for innovative products;                           
–explore particular decisions in setting prices;                           
–issledovat existing sources of information support of innovative processes;                           
–explore risks;                           
-develop recommendations for improving the pricing of innovative products.

The object and the subject of the research work

The object of research are industrial enterprises of Ukraine. The subject of research – theoretical and methodological features pricing of innovative products in industrial enterprises of Ukraine.

1. Scientific-theoretical basis of pricing

Pricing is the process of formation of the prices of goods and services, the price is the market characteristics of the goods, it reflects the interests of producers and consumers. When the management team in a centralized economy pricing process of price formation takes place in the sphere of production, the price is determined only depending on the cost of production of goods and services, with the direct participation of state bodies before the start of the production process. As a result, the market does not play a significant role in pricing. Without causing further price changes demand fixed on their level of a predetermined program. The process of price formation in the market occurs in the sale of products, where "face" the demand for goods and services, offer useful products and services offered, the appropriateness of the purchase, quality and competitiveness. Manufactured goods, services rendered, and the price is tested on the market, where a final price of goods and services [2]. Prices are set according to supply and demand directly by the owner or the manufacturer of the goods and services in this fundamental difference between the market pricing of the cost of the command control system, public authorities can regulate prices only for a limited range of goods. Prices play an important role in the business of each company, as their level depends on the final results of operations, including the profit and profitability. The prices are the main factor in determining the markets for products, the advisability of production of goods and services, calculation of production costs, determine the volume of investment. Options Price shown in img. 1.

Tsenooobrazovaniya Goal: to ensure the survival of the enterprise, the conquest of leadership in terms of market share, the conquest of leadership in terms of product quality, the policy of cherry–picking or harvest, a short–term increase in product sales, to maximize current profits . Ensuring the survival of the enterprise – is becoming a major in cases when the market is too many manufacturers and the very competitive and rapidly changing policies of competitors, the company may face the problem of overstocking due to improperly organized process of production or distribution. The company is compelled to set the lowest rates in the hope of a sympathetic response of consumers [3]. Price reduced to as long as it covers a portion of the value of variable and fixed costs of production. The conquest of leadership in terms of market share. If the company owns the largest share of the market, it will have the lowest costs and the highest long-term returns. Leadership in terms of market share, invariably leads to a desire to maximize the reduction in prices and the desire to achieve a certain increment of market share. The conquest of leadership in terms of quality products. The company sets the maximum price for their products, explaining that improve the performance of product quality here  must be sufficiently high R & D costs. High price for its products, the company can form a prestigious demand for its products.  The policy of cherry–picking or harvest – using emerging favorable situation on the market, for example, unlimited price increases, unsustainable rate of the national currency, the economic crisis, a sharp jump in inflation, scarcity of the product on the company in the short term profits, many times greater than the size of it, which is possible under normal circumstances functioning of the market, then the company starts to gradually lower the price, trying to attract more consumers, or out of the market if it is impossible to ensure the further flow of profits. The short-term increase in product sales [4, 5]. Using the current favorable market conditions, the company sets a very low price for their products, seeking to realize the greatest possible volume of production. Having sufficiently low production costs, and buyers should have a heightened sensitivity to price changes. The principle of maximizing current profits – choose a price that provides a maxim current income and cash income, as well as the maximum reimbursement, the current financial figures for the company is more important than long–term. An entity shall calculate the two basic indicators, based on which it bases its activities: product demand and production costs [6]. Pricing principles are shown in img. 2.

2. Methodical bases of pricing of innovative products

After the preliminary operations, the company proceeds to the choice of the method of pricing. Calculations of the expected base price, is carried out by a variety of methods, although the final level of prices determined by the market. Price, calculated or how the method is the provisional amount, allowing the company to assess the situation in the future the price level is adjusted for discounts, allowances, the current system of taxation and inflation [7]. The choice of method depends on what goals the organization has set itself, what is the situation in the market and consumer characteristics of goods produced and sold. Each of the pricing methods has its advantages and disadvantages, and different effect on the price level. Shevchuk DA identifies the main pricing methods, which are used in the practice of market pricing and divides them into four groups: techniques, cost–oriented, methods, focused on consumer demand, parametric methods and techniques focused on the competitive environment. Methods based on cost accounting, reflect the orientation sellers are traditional and quite common, due to the presence of the required information from enterprises, ease of calculations, the ability to define the lower limit of the price allowing compensate for costs incurred. However, they have drawbacks: not taken into account the level of demand and can be a situation where because of the high prices of goods will not be realized; Expensive price does not reflect measures the value of goods for customers; ignored the impact of competitors' prices and their behavior.

Can be divided into five options pricing, cost–orientated:
– on the basis of full costs (the cost +);
– on the basis of marginal cost (marginal cost, the reduced cost, direct costs);
– on the basis of sales revenue;
– on the basis of return on investment;
– with the break–even point [8 - 11].

3. Guidelines regarding the improvement of pricing or innovative products

When setting prices must take into account the possible reaction of the major consumer groups. It is closely linked to the expectations of the consumer and the manufacturer's reputation. Consumers would rather buy the products at a higher price, but with a well–established brand. But at the same time to avoid the formation of negative public opinion about the so-called "excess profits", even if the good reputation of the manufacturer. This may encourage consumers to make an order where suitable alternatives are available. Getting addressing the issue of the final price of their products must be remembered that the definition of its size can not be done without taking into account the market situation and the overall strategy of the company [12]. Practice shows that the final size of the price must be determined marketing manager, marketing, economics and finance. Each of them their views about the level of prices and therefore often have to do more than one iteration to come to an understanding. In conclusion summarizes the main results, conclusions and systematically justified degree of achievement of goals and objectives of the study. The main factor taken into account when setting the price, is to study the competitors' prices. Actual and potential competitors are always trying to assess the cost structure of production and profits. The real competition will strive to offer the same or better products, and potential – to seek to enter the market if, in their opinion, the profits can be high. Price is the most visible of all the components of competitiveness and, therefore, it changes to quickly detect and cause a reaction. Changes to other elements may be less visible, they are harder to find and organize the response. It is in the pricing of new products or services the main thing is that the price (as are the goods or services) it was easy to see that the client saw that the prices reflect the real price of a product or service that enhances customer confidence in the company, leads to repeat purchases [13 - 15]. Active policy of reducing the degree of uncertainty of the client, if it is a new service or goods motivates the trust of customers.

Conclusion

Pricing policy – an activity of the enterprise, aimed at achieving its primary objective with the help of the price.
There are three main tasks of pricing:
– increase in sales volumes;
– obtaining the greatest profit;
– maintaining the existing state.

The sequence of the development of innovative pricing policy of the enterprise:
1. selecting targets;
2. determination of demand;
3. cost analysis;
4. analysis of competitors' prices;
5. choosing pricing method;
6. setting the final price;
7. development modification of prices;
8. pricing strategy for different segments of the market.

References

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Note

At the moment of writing this abstract master's qualification work is not completed yet. Final completion is scheduled for January 2016. Full text of the work and materials on the subject of the work can be obtained from the author or her supervisor after this date.