Summary on the final work
Content
- Introduction
- 1. Marketing in the service sector
- 2. Marketing price policy in the service sector
- 3. Pricing methods in the services market
- Conclusions
- List of sources
Introduction
Pricing in the service sector has a number of features, as opposed to goods, services are intangible and can not be stored. Choosing a method of forming on services must take into account the specifics of a given price. In addition, a large number of entrenched market competitors' services, lack of experience, lack of information for analysis, low awareness of the target audience – all thes make the pricing of complex services, but no less important, as the service industry is booming, especially in Infocomm area.
The aim of this paper is to summarize the theoretical foundations and practical recommendations on the organization of marketing pricing in the service sector.
The object of this study is marketing pricing.
Subject of research – marketing pricing policy in the service sector.
To achieve this goal it is necessary:
- determine the features and the role of modern marketing and its main element, prices in the services sector;
- consider the pricing policy of the enterprise to provide services as a system, including the principles and methods of pricing for services.
Methods: analysis of scientific papers on pricing, systematic approach and synthesis.
Information base: the works of scientists, online resources for price management in general, including in the service sector.
1. Marketing in the service sector
Clarify the concept of services. Service can be considered any useful activity which one party (the manufacturer) has to offer the other party (the consumer) and is characterized by variability of quality nesokhranyaemost, is inseparable from the source. Services can be tangible and intangible.[1]
Until recently, the service organization conceded to firms producing goods in the intensity of use of marketing., Considering it too expensive.
Successful service companies are focusing at the same time as its employees, and the customers. They are well aware of the value chain service-profit
, which links the company's profit service sector with satisfaction of employees and customers. This chain consists of five units:
- reasonable profit on services and its growth;
- satisfied and loyal customers;
- increase in value services;
- satisfaction and performance of employees;
- the internal quality of service.
Figure 1 shows that service marketing requires both internal and external, and bilateral marketing.[4]
Figure 1 – Types of marketing in service industries
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External marketing determines the preparatory work for the company, pricing, distribution and supply services to consumers.
External marketing – marketing to people who are not employed by the company.[2]
In the case of external marketing, customer analysis begins with the performance of market segmentation. There is an obvious method of separating internal client category.[3]
Internal marketing includes job training and motivation of employees, aimed at improving the quality of customer service.[2] It requires the organization to the service sector paying special attention to the quality of personnel, effectively trained them to teamwork and to ensure customer satisfaction. If the company intends to provide the highest quality service, every employee as a marketing department and other functions should be focused on the customer, to achieve marketing objectives.
Two-way marketing is that the perceived quality of service depends largely on the quality of the customer interaction with the vendor in the purchase of services. In marketing, the quality of goods purchased goods is almost often depends on how you purchased this product. But in marketing services quality of service depends on the service provider, as well as on the quality of delivery. Effective communication of the supplier and the consumer is very important for satisfactory transmission service. Buyer judges the quality of service, not only in terms of quality, but also on the functional characteristics. Every interaction is a kind of moment of truth
for the provider, in which the consumer develops a certain impression, not only on the individual services, but also the organization as a whole. Effective interaction with the buyer the seller can guarantee customer satisfaction, not only once, but in the future. To do this, you need to develop relationship marketing skills.
Today, as competition intensifies, increased costs, and productivity and quality deteriorates, you should take a more sophisticated marketing solutions. the service sector of the Organization faced with three major tasks of marketing – they want to increase their competitive differentiation, service quality and performance.[4] Price is the main tool for solving the above problems of marketing.
Price is the most flexible and cost effective marketing tool.
2. Marketing price policy in the service sector
Pricing policy – the most important part of the marketing policy, which is a set of tools (instruments) management in the enterprise prices. On the basis of a systematic approach pricing include: principles and methods of pricing, price targets and market strategies, options for price differentiation, price changes tactics. The essence of these elements is considered in[5,7,10,11]
The immediate and affect other elements of the price policy are the principles of pricing, then - especially the goods, in the considered work - especially services.
General principles of pricing are as follows:
- price – is a means of achieving certain objectives of the company;
- priority external pricing factors;
- the principle of interconnection pricing decisions with other solutions(element of the marketing mix);
- base price right decision – quality information support.[6]
Before determining the price of services, the firm must answer the question: what problem will be solved when setting the price of a service?
- preservation of stability in the market. Alternatively, this problem can be called survival
. Usually this is the main problem of small and medium-sized firms. They are content with not very high rate of return and try to maintain its market share;
- expand market share. This problem is typical for companies, aimed primarily at economic growth. The activities of such companies is characterized by aggressive marketing and pricing. At the same firms often use dumping pricing, but we must remember that the price may be an indicator of the quality of services. Therefore, lowering the price, the company may, instead of market penetration, on the contrary, lose potential customers;
- profit maximization. Perhaps this is one of the most difficult challenges facing the company. The main difficulty lies in the fact that the organization needed to accurately determine the demand for services provided by it. If the price is set by the market for the company and does not depend on the volume of its services, the situation is simpler. In this case, the company in order to maximize profits you need to find only the best of services that can be done with CVP-analysis (analysis of costs, volume and price of goods or services), which is used to find the optimal output for a given product price, fixed and variable costs ;
- creating the image of expensive high-quality services. In this case, the firm provides for a great price with high quality services. As a rule, the number of customers at the same time is reduced, but the reduction in the number of services sold offset by higher prices. The company has thus positioned as elite.[8]
3. Pricing methods in the services market
In the professional literature, there are different classifications of pricing methods, but they are often replaced by pricing strategies. However, this is not the same thing. pricing strategy - it is the restrictions imposed on the price of services in order to implement the pricing policy. For example, the implementation of a survival strategy, the company can determine for themselves what the price should be no higher than average. pricing method – a procedure for the formation of prices for a specific service at a specific time period within these constraints.
Let us consider three basic methods of pricing: cost, market and parametric.
The cost method.
Perhaps the most widely used option cost method "average costs plus profit." Its essence lies in the fact that the firm estimates the average costs incurred in providing services units, and adds to it a certain rate of return. The main advantage of the method lies in the fact that companies do not need to evaluate demand, we need only to know the magnitude of costs. However, if you do not take into account the demand for services, there is a risk to assign a price that is far from optimal: how inflated, leading to loss of customers, and understated, which is fraught with decline in revenue. The cost method is suitable to small firms operating in the market of monopolistic competition, or by the monopolist. In the first case, the company does not have to spend money on market analysis and pricing using parametric methods. In the second case other methods than costly simply make no sense.[9]
Market pricing.
Many small companies operating in conditions close to perfect competition, taking as a basis the average price of the market price for similar services.
However, for organizations that rely on the quality of services, this method is not suitable – when market pricing services of different companies have similar characteristics with minimal differences. Otherwise, navigate to the average market price or the price leader simply does not make sense.[9]
Parametric methods.
This group of methods includes the cost of the expert assessment services based on the values of its parameters. Thus it is possible to consider as a main parameter (unit price method) and a set of parameters (points method).[9]
Method specific price. Seller is necessary to determine the main parameters of services, which has the greatest importance for buyers to choose Next similar basic service, the price of which will be taken as the base, it may be the service of both the seller and the competitor. Specific price of the base service is determined by the following formula (3.1):
Уд = Ц0/П0, (3.1)
Уд – unit price;
Ц0 – the price of the basic service;
П0 – target setting basic services.
Price service, taking into account the specific prices of basic services, is calculated by the following formula(3.2):
Ц1 = Уд * П1 = Ц0 * ПМ1/П0, (3.2)
Ц1 – the price of the current service;
П1 – target setting current service.
Points method. It defines a set of parameters characterizing the value of services. Each of these parameters is a certain significance for the buyers, which is assessed on a scale of expert method for the base and new services. Further, based on expert evaluation of each parameter is assigned a weight that reflects the contribution to the total value of the parameter service weight sum of all parameters must be 100%.
Price service is determined by the following formula(3.3):
Цн = Цб * ∑((Пнi / Пбi)* ki), (3.3)
Цн – the required price of new products;
Цб – the price of the basic service;
Пнi – i-th value of the parameter for the new service;
Пбi – i-th value of the parameter for the basic services;
Ki – weight ratio i-th parameter.
The method of economic-mathematical modeling. It is similar to the previous method, but with the difference that allows us to estimate the weights of each parameter on the basis of empirical evidence, but based on the statistics of processed laws. To do this, select a number of similar services and construction model, for example, in the form of regression equation (3.4):
Ц = a0 + k1*П1 + k2*П2 + … kn*Пn, (3.4)
Ц – service price;
а0 – free term of the regression equation;
ki, i=1…n – weight ratio i-th parameter;
Пi, i=1…n – value, i-th parameter.
Choosing pricing method, the seller does not define the final price of the service. At the final price may affect additional factors - actions of competitors, a temporary increase in demand for the service, etc.[10]
Conclusions
At this stage in the developed countries the volume and rate of growth of the market services more than the commodity market, especially in the field of information communications. A large number of competitors, the high demands on the quality of services, specific services such as goods points to the role of marketing in this area. With proper organization and marketing science-based pricing, the company in the services sector will be able to ensure their competitive advantage, and achieve economic goals.
List of sources
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- Ценообразование в сфере услуг [Электронный ресурс]. – Режим доступа: http://studbooks.net/931392/marketing/tsenoobrazovanie_sfere_uslug
- Особенности ценообразования в сфере услуг [Электронный ресурс]. – Режим доступа: http://fd.ru/articles/24850-osobennosti-tsenoobrazovaniya-v-sfere-uslug?ustp=W
- Окландер М.А., Чукурна О.П. Маркетингова цінова політика Навчальний посібник/ – К.: Центр учбової літератури, 2012. - 240 с.
- Евдокимов Ф.И., Гавва В.М., Тарасьева Л.В., Ярым-Агаев А.Н., Надтока Т.Б. Маркетинг и компьютер: учебное пособие/ Донецк, ДонНТУ, 2006г. – 540с.