4.2 Calculation & Pricing
4.2.5 Criteria for the price decision
The calculation has to calculate the cost prices on the basis of operational reality. However, the decision of the sales price must also include aspects of the marketing strategy. The price sends a message. The price conveys a feeling of value to the customer: Thus, a high price can mean for one customer an expression of "luxury", for another an expression of "too expensive!", for a third "reasonably priced!" and for the fourth customer: "fits!
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The achievable sales price is in a defined relationship to the market price. The sales price must find a justification to deviate from the market price - the competitors. It must not fall below the cost price in the long run. |
The following considerations are helpful in justifying the selling price:
- What is the relationship between the sales price and the market price and cost price of the company? Maximum price, high price, normal price, low price, dumping price?
- Sales price in customer evaluation: How do customers rate the offer? What is the customer benefit? Unit price and individual price?
- Price sensitivity of customers: How do different customers react to the sales price.
- Optimal price structure: What is the optimal price structure for the company's services? Which price variants and target groups should be distinguished in the sales price?
- Competitor reactions: What prices are the competition taking? How will you react to the new offer and the new selling price?
- The prices actually achieved must be determined: What is left after deducting discounts and rebates? What prices are actually achieved in reality? What does the final costing look like?
- Selling price and market price: How do the two relate to each other in concrete terms? Is the sales price in line with the market?
Pricing decisions have a strategic significance. They have a communicative effect for the company.