The pricing mechanism implies all sorts of principles, patterns, and also methods of pricing, in this case the selling price of goods. During pricing, the seller operates with such definitions as composition, price structure, pricing index, prices for a similar product, competitors' prices, circulation losses, profit margins, and so on. It should be noted that when setting prices, the trade organization will try to take into account all factors that have a direct effect on the price of the product and its level.

At the core trade pricing mechanism are the principles and methods of price formation that are mediated by firms. Price policy in a trade organization finds its expression in tactical methods of cost management, and also the formation of price indicators.

The pricing mechanism in trade is characterized by several factors, let’s consider them:

Firstly, this type of market or market niche, in which it is carried out trading activities. There are two diametrically opposed types of markets - a perfectly competitive market and a monopolistic market.

A perfectly competitive market presupposes the presence of a large number of sellers in the market selling goods that satisfy the same needs of buyers. In such conditions, none of the sellers is able to exert significant pressure on prices, so the trading organization has to set prices at the level of its competitors and manage sales through a flexible marketing policy, as well as other methods of promoting goods to the market.

In conditions close to a monopolistic market, price is the priority of the monopolist organization that occupies this market segment. In relation to monopolistic organizations in all developed countries, there is antitrust legislation that prohibits monopoly pricing. However, almost the entire raw materials sector of the Russian economy today consists of several monopolistic companies.

Please note: those players who still try to dictate their terms on the market by establishing monopoly prices are forced by the state, represented by the antimonopoly authorities, either to set them within the framework.

Secondly, important in the pricing process is conditions of each market, as well as the temporary nature of the current situation.

Let us assume that demand in the market is characterized as relatively stable, so the company can count on a certain sales volume at a specific price level (guaranteed sales volume). For this market state, the mechanism of passive pricing is most often used, the essence of which is strict adherence to costly methods of pricing without taking into account market changes and consumer preferences. An example of such a market is the jewelry market, where demand is impulsive and is set by a random variable (without taking into account the seasonality factor).

In a growing market situation, passive pricing is not the best option, as consumers become more and more vocal about their intentions, desires and tastes. In these conditions, active pricing is most beneficial, when the price is flexibly adjusted to the consumer, taking into account any changes in market movements. Active pricing is characteristic, as a rule, of markets close to conditions of perfect competition. An example would be stock trading, which is most sensitive to changes in the market situation.

In addition to the type of market and the main trend of its development, the price formation process is influenced by stage life cycle goods. As a rule, for new products the price is of an exploratory nature. As the product spreads and is accepted by consumers, the price reaches its stable level. When the market is saturated with this type of product, the selling price decreases, etc.

The pricing mechanism of a trading enterprise involves various. The main methods are:

1. Costly methods, including methods:

full cost method;
direct cost method;
break-even point method;
marginal cost method;
method of accounting for return on equity;
method of accounting for the efficiency of investment use;

2. Market methods:

method based on the perceived value of a product;
method for assessing the maximum acceptable price;
adversarial method;
a method of following market prices.

In addition to the above, there is an administrative method of pricing and a parametric method.

The pricing policy of a retail trade enterprise is developed taking into account the fact that, on the one hand, the enterprise must engage in procurement marketing, and on the other, sales marketing.

At the store great opportunities choice thanks to a wide range of offers from both manufacturers and numerous large and small wholesalers.

The store's purchasing policy is focused on customer demand and at the same time receiving the planned share of profit from the product. Retail pricing trading company may be cost based and/or market driven.

The cost method involves the retailer determining the selling price of a product as the sum of its purchase price and a fixed percentage of it. Under the market method, prices are set based on the willingness of buyers to pay for a given product.

The main advantage of the cost method is that it allows you to provide the required level of profit and is simple. The advantage of the market method lies in its connection with the concept of marketing. Its use involves taking into account both the desires and capabilities of buyers. However, the application of the market method is fraught with considerable difficulties, especially in trading firms whose product range includes thousands of trading units, and individual pricing decisions are required for each unit.

Setting a price for a specific product takes into account all the variety of marketing factors in the enterprise's strategy. The specificity of retail trade is that the buyer in most cases makes a purchase in an assortment. That's why price policy takes this circumstance into account, setting, for example, low prices for one product with the expectation that other goods will be purchased at the same time at fairly high prices. The price of a product must ensure: the sale of the product, its competitiveness, compliance with its value, and the profitability of the enterprise.

Obviously achieve optimal solution allows the combination of cost and market approaches, when the first becomes the basis of the pricing strategy, and the second is used to attract buyers. The pricing strategy is aimed at ensuring a balance between the interests of the consumer and the interests of the company. In addition, this strategy must, of course, take into account the situation in the competitive market.

In the book by M. Levy and B.A. Weitz's "Fundamentals of Retailing" (1999) states that in the modern retail market there are two opposing pricing strategies: "everyday low prices" (ELP) and high/low prices. Retailers implementing the ENC strategy emphasize that their retail prices consistently remain somewhere between regular price levels and competitors' sales levels, and they do not always offer the cheapest goods. At certain times, the price may be higher than the purchase price on sale at a competitor's store or wholesale market.

The advantages of the ENC strategy are as follows: the threat of price wars is reduced, since buyers, realizing that prices are at an acceptable level, increase the one-time volume of purchases and visit the store more often; the need for advertising is reduced, since low prices consistently attract buyers; Profits can increase due to the fact that the store abandons the practice of significant discounts provided for by the high/low price strategy.

The implementation of the ENC is complicated by the fact that low prices must be maintained constantly, i.e. In low-price stores, clothing items should be sold cheaper than in department stores, and ordinary products (flour, milk, sugar) - cheaper than in supermarkets.

"Family" is a chain of inexpensive clothing stores in Moscow. Mostly "Family" stores sell clothes from little-known Chinese and Turkish clothing brands. All Familia stores in Moscow offer a very large assortment of clothing. Prices for all clothing are at a very low level, and total sales are regularly held, since stock stores need to have a high turnover of clothing. During a total sale, prices for clothes in Familia stores drop by another 30-50%, thus reaching ridiculous levels. The quality of clothing in "Family" stores, taking into account its cost, is at high level- it is impossible to buy such clothes at such prices in any other store, except for the direct competitor of the Familia store.

See: Last name - clothing stores // Poundpig.ru.

Merchants implementing a high/low price strategy may in some cases offer products at higher prices than their ECC competitors, but they often hold sales and advertise them heavily. Whereas previously sales were usually held at the end of the season, or in cases where suppliers offered low prices or stocks exceeded standards, today sales are organized much more often. The advantages of the high/low price strategy are as follows.

• 1. The same product is intended for different segments: at the market entry stage it is offered to “super innovators” and “innovators” at high prices, and at the end of the season this product can be bought by people attracted by its low cost.
• 2. The exciting atmosphere of sales attracts a huge number of buyers, as a result of which all the goods are actually sold (though at different prices).
• 3. The emphasis is on quality or service (since the original price of the product was high, even on sale the buyer evaluates its quality as very good, which is not always the case when applying the ENC strategy).

To run a successful business you need to use strategic planning, in particular regarding issues of reducing prices and conquering new markets. Until 1980, the practice of Western trade was to organize annual special sales, but then sellers realized that in order to attract buyers every day, it was more advisable to lower prices every day different ways. This method allows you to reduce advertising costs.

Although the main pricing strategy of retail trade is most often based on a combination of SPC and high/low prices, other tools are also very popular - coupons, discounts, plastic cards, price leadership, multiple pricing, price equalization, odd and non-round prices, etc. However, their use is determined by the main pricing strategy.

Coupons- These are certificates that grant their holders the right to a reduced price or other benefit when purchasing a product or service. They are mainly used for everyday goods. Coupons are published in newspapers and magazines (often after advertising for the relevant product), they are laid out in mailboxes consumers, sent by mail, applied directly to goods, distributed into the hands of passers-by. Coupons inform consumers about a product, encourage them to make purchases, and attract their attention to a particular store, reinforcing it competitive advantages, increase the intensity of use of the product. Most often, they try to attract new customers with the help of coupons; attracting a regular customer is not always advisable and is even negative in nature, since the total number of purchases does not increase, and the profit from the sale of a unit of goods decreases.

Price discounts- this is the part of the price that is returned to the buyer of the product. They should only be used if a specific purpose is being pursued, for example, with significant volumes (in monetary terms) of one-time purchases of goods. The retailer carefully calculates the system of price discounts; they are beneficial to him when working with product suppliers and, under certain conditions, when making payments to end consumers.

The store's gross profit will depend on how much more product it can sell as a result of the price reduction. If demand for a product is elastic, then a reduction in price by, say, 15% should cause sales to increase by more than 15%. The retailer must clearly calculate how much of the product should be sold at a discount to achieve the required gross profit. Two points should be taken into account: the degree of need for the product and the frequency of purchase. In addition, it is important to consider the competitor’s reaction to a price reduction. If they respond to your discounts by lowering prices even further, both the retailer and competitors are sacrificing profits.

In general, discounts on the price of a product are considered an acceptable and reasonable tactic for a retail trade enterprise in cases where it is necessary to:

• o attract customers to the store, make it popular, expand market share (however, you must first clearly determine which goods and in what quantities can be sold at a reduced price);
• o release warehouses, sell goods with expiration dates, out-of-season goods;
• o implement discounts as a measure caused by competition.

Plastic cards are used by companies that make such markups, the level of which allows them to be painlessly reduced for any buyer, or by companies conducting an advertising campaign where a plastic card is considered as an element of advertising.

Cards can be personal or bearer. The card entitles you to a discount of a certain amount or, more often, a certain or floating percentage on your next purchase. The floating percentage may change depending on the day of the week, season, the introduction of additional benefits, or increase in proportion to the amount for which the buyer purchased the goods from the trading company over a long period.

Scheme of club plastic cards differs from the previous method of providing discounts on the next purchase only in that the organization of the club, schemes and distribution of the cards themselves is undertaken by a specialized third-party company. Its task is to involve the maximum number of trading firms on contractual terms and buyers (on the terms of purchasing cards) into a game organized for everyone. Club cards are widely used in international practice.

Discount plastic cards used in trading companies targeting wealthy segments of the population. These cards have their own information carrier containing data on the remaining amount for which the buyer can make purchases at a discount, or a personal number read by a special device connected to a computer that determines the balance of the amount not sold by the buyer. This type of card is designed for an amount that provides for the buyer’s further purchase of goods within a certain time.

If we translate the methodology for using discount cards into accounting language, it is quite obvious that the buyer provides a loan to the trading company.

Club "L" Etoile was formed in November 2001.

The purpose of creating the club is to, through a system of cumulative discount cards, additional discounts, promotions and services, enable customers to be interested in being served by L'Etoile stores.

The club’s task is also to provide constant and prompt feedback from customers in order to introduce new special offers that stimulate purchasing activity, taking into account their interests.

The club regularly holds various events for regular customers, club parties, concerts, presentations of new products, services for regular customers by cosmetologists and makeup artists of manufacturing companies or our stores for free or with discounts, etc.

Conditions for receiving discount cards:

1. To receive a 10% club card, it is enough to make a purchase in any L'Etoile store for an amount of at least 399 rubles and completely fill out the client's personal questionnaire.

The discount card of the "L" Etoile network is cumulative based on the amount of purchases.

• 2. If you lose your discount card, please contact any L'Etoile store.
• 3. Discounts on discount cards may be subject to additional conditions.
• 4. The discount card status is upgraded when the following amounts are reached:

Ruby Card (10% discount) issued upon purchase of RUB 399 or more.

Sapphire Card (15% discount) issued for purchases totaling over RUB 3,000.

Amethyst Card (20% off) issued for purchases totaling over 15,000 rubles.

Diamond Card (25% discount) issued for purchases totaling more than RUB 25,000.

Club "L"Etoile" //L"Etoile [Official. website]. URL: letoile.ru/club/cards/

Gift Certificate(gift card) is a document confirming an advance payment and entitling its holder to receive goods and/or services in an amount equivalent to the face value of the certificate.

Gift certificates can be divided into the following groups:

According to the option of indicating the denomination:

• o certificates and cards with a set denomination (usually 500, 1000, 2000 rubles, etc.);
• o certificates and cards with a free denomination (in this case, the denomination amount is set by the buyer of the Certificate).

By organization specialization:

• o for the purchase of goods (cosmetics, optics, household goods, clothing, shoes, Sports Equipment and etc.);
• o to receive services (medical, cosmetic, hairdressing services, sports center services, etc.).

According to the validity period of the certificate:

• o with a specified validity period (1, 3, 6 months, 1 year, until the end of the year, etc.);
• o without a set validity period (serviced until the nominal amount expires).

According to internal service rules:

• o assumes one-time use. The entire amount of the certificate is used at a time and in full, while the certificate itself is irrevocably transferred to the seller;
• o can be used several times. If the purchase price is less than the face value of the certificate, then you can use the remaining amount next time.

Price leadership is a strategy based on an “attractive” (“inviting” product). It involves a retailer pricing certain items below normal levels in the expectation that the event will attract additional buyers and will increase sales of other store products. As a result, the buyer gets the impression that the store's prices are lower than others. Sometimes such products are called loss leaders. Although, to be unprofitable, such goods must be sold at a price below cost, which usually does not happen. Everyday goods, the prices of which are well known to customers, are used as “welkers”.

In supermarkets, the "sales" items are usually eggs, milk, sunflower oil. The promotional product strategy is designed for frequently purchased products by price-sensitive buyers.

Multiple Pricing is that homogeneous goods of different weights (volumes) are sold at different prices. For example, a 100-gram package of coffee of any brand will always cost more (in terms of 100 g of weight) than the same coffee, but in a 200-gram can. This method aimed at increasing the sales volume of goods. Its peculiarity is that it allows buyers to stock up on certain goods for future use, consider the purchase profitable, and ultimately leads to an increase in the buyer's consumption of goods.

Multidimensional Pricing used to “push” goods and is aimed at forcing the buyer to buy two or more goods at the same time, for example, offering “three for fifty rubles.”

When using the method leveling the price line the store offers different levels of predetermined price items. The buyer has to choose between a cheap, medium-priced, or expensive product. Moreover, on store shelves, goods are grouped by price levels. When purchasing products, retailers select those that correspond to selected price levels. It is easier for the buyer to make a choice, since he is not confused by a large number of brands. Less time is spent on purchasing. For example, the store Men's clothing"can group ties into 120, 500 and 1000 rubles, depending on their appearance and quality.

The advantage of this method is that it is easier for the retailer to count the stocked goods, it gains additional flexibility, but the purchase price of some goods may be slightly higher or lower than necessary. Some of this flexibility may be lost because firms are forced to eliminate products that are potentially profitable but do not fit into any price range.

Odd and non-round prices- are ineffective for “pre-selection” products, the purchase of which requires some thought.

When buying a car, it doesn't really matter whether the buyer has to pay $9,995 or $10,000 for it. Non-round prices are associated by the buyer with a cheap, popular product.

To improve the visual perception of the price, its adjustment is used (for example, setting the price to 499 instead of 500).

"Include bait" pricing is the illegal practice of product "pushing" in which a retailer sets negotiated prices (with no intention of selling the product) and then advertises the offer to attract customers to the store. Bait pricing occurs when a buyer of an advertised "bargain" appears in a store and the retailer attempts to "switch" the buyer to a more expensive product or brand.

Prestigious pricing- a technique in which a retail trade enterprise sets prices for products that are quite high compared to competitors in order to differentiate itself from their background. A high price has a psychological effect - it convinces people that these goods (and the company offering them) are of better quality.

Based on the above, the price formation methodology can be presented in the form of a diagram (Fig. 4.2).

Definition 1

Retail trade is the sale of goods and services by the piece, or in small quantities, carried out through retail stores.

Retail Pricing Strategies

Retailers are developing their own pricing strategy for branded and unbranded product groups. The strategy for developing retail prices at a trading enterprise is designed, taking into account the goals and pricing factors, to determine the price range depending on the goals of the store.

Pricing strategies in retail trade The most important factors to consider are:

• recommended basic retail price level;
• range of price fluctuations relative to a set level.

The choice of pricing strategy is related to the goals of the enterprise:

• offering consumers exclusive, expensive goods;
• thrift store

Another most important decision in the process of choosing a pricing strategy, is to determine the type of pricing. Either this is a choice of constant prices or floating ones.

There are several areas of conditions for the sale of goods, for which different pricing strategies are chosen:

• traditional conditions for the sale of goods;
• new products and stores;
• assortment groups of goods.

Let's consider the traditional conditions for the sale of goods, for which they use either a strategy of stable low prices or a strategy of changing prices

Stable low price strategy

This strategy involves setting not the lowest prices, but prices that are at a constant, stable average level. That is, in contrast to stores that offer prices one level higher, and during sales periods one level lower.

The goal of this strategy is to consolidate in the minds of the consumer the understanding that in this store you can always purchase goods at a stable average price. Such a message develops a certain trust in the consumer, and therefore the buyer visits the store more often, making larger purchases. Which in turn brings the store stability in product turnover, and hence income and profit.

Another advantage of this strategy is that due to the absence of sales, stable prices lead to lower costs for promoting goods and improved quality of service.

Variable Price Strategy

Strategies for changing prices in last years has gained great popularity. It consists in the fact that the company sets high prices to create a prestigious image. But at the same time, it holds sales or other events quite often to stimulate consumer purchasing power. To create a prestigious image, a high price is used due to the psychological aspect, which presupposes that the consumer has developed a relationship between the price level and the level of product quality. For the same reason, a low price can provoke a decrease in demand, since for the consumer such a price does not fit into the usual price range for a given service or product.

Note 1

As a rule, this strategy is used either when there is little profit from selling at low prices, or when there is too much competition in the market. Due to high competition, popular companies are reducing the intervals between sales; now they are not only seasonal. Thus, the store is able to sell the product in stages to different levels of customers. When a new product appears, the product is offered at an inflated price, then the price gradually decreases, which leads to an increase in demand and an increase in sales. The final stage is end-of-season sales, which attract low-price buyers.

Galamart models low prices

The drogery soft-discount chain Galamart calls itself a “permanent sale store” and a category killer. Given the complexity of the price management process and the lack of ready-made solutions, the company has developed its own IT program to maintain the image of a store with the lowest prices.

“The buyer’s attention to the price of goods and the positioning of the store has increased. Hence the need arose to build systems for operational monitoring of competitors, forming an idea of ​​the price level and allowing them to respond accordingly. Price in Galamart stores is a tool for managing the speed of sales, maintaining strict turnover standards and profitability of goods. Therefore, systems are needed that can simulate sales dynamics by selecting optimal level prices for a particular position taking into account projected profits.”

A signature feature of the chain is seasonal sales. While retail chains, supermarkets and hypermarkets raise prices for seasonal goods, at Galamart the prices for these goods are reduced. Moreover, in the store’s assortment management system, there is a formalized process for marking down goods that have unsatisfactory sales dynamics. This mechanics allows, on the one hand, to offer real discounts every day, and on the other hand, it increases the turnover of goods, ridding shelves of illiquid goods.

The pricing process is considered by the network taking into account two criteria:

1. how the buyer perceives the price,
2. what is the efficiency and profitability of the business.

When working to find the optimal price, a set of solutions is used: collecting data on competitive prices offline through a mobile application, site parsing (scanning sites to extract the necessary information using a robot program) to collect prices in open sources, aggregation and primary processing of monitoring data based on 1C, business analytics and model building in QlikView, expertise of category managers. Currently, options for using machine learning and working with big data in price management mechanics are being explored.

Data collection is carried out using a mobile application, which allows you to quickly collect information about prices, take photographs of the product and price tag, write a comment on the product (if necessary), and send data to the server. Each store has its own set of competitors, so each store gets its own prices for indicator positions. Monitoring is carried out at least once a month for each group. Each store can request price changes online if a competitor has reduced prices between monitoring periods. The list of goods for which standard monitoring is carried out is limited, but items outside this list also appear.

Automation of the process makes it possible to carry out monitoring of competitors with optimal expenditure of the contractor’s time, and also to eliminate the lack of a product group from a competitor during monitoring.

Data processing takes place on a new platform developed on the basis of 1C:Enterprise 8.2. There are many systems on the market with the ability to quickly generate reports in various sections. The main choice of the Galamart network is the BI analytical platform “QlikView”. On at this stage short-term and long-term planning operations are carried out according to indicators, monitoring the implementation of plans, structural analysis of sales by category, region, profitability analysis: by category, store, in terms of all basic indicators, etc.

“The introduction of this or that tool is intended, first of all, to reduce the role of human expertise, to reduce the level of uncertainty, which always reduces the quality of decisions. Products for a wide range of users (an application for collecting competitors’ prices) did not require serious training, but analysts had to be taught the functionality of QlikView,” adds Oleg Nikolaev, project manager for process automation at the Galamart chain.

The final step is to distribute tasks to performers. All of the above were launched last year and are in the process of continuous improvement. Despite a well-developed pricing strategy, Galamart is purposefully moving towards development.

Deputy Director for Network Development Amiran Ibragimov spoke about the improvements planned in the near future.

– Should we expect the appearance of electronic price tags in chain stores? Is this technology necessary in your format stores?

– The project for introducing electronic price tags in Galamart chain stores has already been put into development. Formed working group project, and work began on collecting information from suppliers and making presentations.

We understand that taking into account the concept of extremely dynamic pricing, in which about 700 price tags change per week in our stores, the implementation electronic format these media is a vital aspect.

In addition, there is another serious plus - convenience for the buyer. In this regard, we will work out all the nuances, select 1-2 test stores, get preliminary results, make adjustments and come to a decision on implementation and further replication. The forecast for implementation in test stores is the 4th quarter of 2017.

– What are the advantages of implementing a machine learning system in a store? When and how are you planning to implement the project in the Galamart chain?

– We are currently studying the issue of introducing machine learning based on working with neural networks, and the automation department is already busy with the project of using this breakthrough technology in terms of pricing. This is a very important block in the work of any retail network, and we believe that machine learning will help find those hidden resources that simply cannot be identified when using manual labor employees.

If we talk about the timing of implementation, now Galamart is at primary stage when information is being collected. The actual testing in the first 5–10 stores is planned to begin in the 1st quarter of 2018. By the end of 2018, we want to reach the stage of full implementation of this technology specifically in terms of pricing.

– What, in your opinion, are the key factors for the successful development of the Galamart chain?

– The work of our network is based on four principles:

1. Low prices every day (Every day low price). The buyer can always find products with fair discounts and products with unique promotions. For example, “All for 9-19-29-39-49.”
2. New items every day. At Galamart, the assortment is constantly updated, and many new products appear every 2 weeks.
3. Successful work with seasons/micro-seasons. Stores always have products that meet current needs clients.
4. Working with goods of impulse demand.

The economic model of the network has been tested on a large number of projects. Payback on capital costs is achieved in 1–2 years. There are cases where the payback was less than 1 year. The launch of a new store takes place within 60 days - the period that passes from the moment the commercial concession agreement is signed until the festive opening. This includes all stages, including renovation of the premises.

The federal franchise retail network, operating in Russia since 2009, includes more than 170 stores. The main product groups presented in the stores: dishes, haberdashery, household goods, goods for children, gifts, auto products, tools, household chemicals, cosmetic products, products for animals, for sports and recreation, stationery. About 70% of the assortment consists of imported products from China, India and Brazil, 30% - Russian producers.