What Does a Pricing Analyst Do?

Pricing decision analysis refers to the decision-making analysis of how to determine the price level of sales products in a short period of time (such as one year) in order to ensure the realization of its business objectives in the field of circulation. Including the decision of optimal selling price, decision of target price, decision of price adjustment, price elasticity strategy and new product pricing strategy.

Analysis of pricing decisions

Right!

Pricing decision analysis refers to the decision-making analysis of how to determine the price level of sales products in a short period of time (such as one year) in order to ensure the realization of its business objectives in the circulation field. Including the decision of optimal selling price, decision of target price, decision of price adjustment, price elasticity strategy and new product pricing strategy.

Chinese name

Analysis of pricing decisions

Foreign name

Pricing decision analysis

Range

Consider the value of the product

Special color

Cost consumption level

Enterprise pricing decision analysis usually needs to consider the value of the product, the level of cost consumption, the quality level of the product, the relationship between supply and demand and the form of competition, the elasticity of the price, the stage of the product's life cycle, the pricing goal, the price of the product, the price difference, and the price system , National price policy and pricing methods and strategies.

In a highly developed market economy environment, there are mainly three types of prices: monopoly prices, completely free competition prices, and enterprise controllable prices.

Monopoly price refers to the collective name of national monopoly prices and monopoly prices of corporate consortia set by pricing entities (including the state and corporate consortia) who have a monopoly position because they have absolute control over special markets or specific resources. Monopoly prices have a compulsory controlling effect on individual enterprises, and enterprises have only the obligation to execute and have no right to change.

Completely freely competitive price refers to the price formed by the laws of supply and demand when the number of suppliers and consumers of a certain commodity in the market is large and scattered, under the condition of completely free competition. Due to the low market share of individual enterprises, if the price is raised or lowered without free competition, it will only lose the original market or cause losses. Therefore, the enterprise must determine the equilibrium price according to the objective supply and demand laws of the market, and consciously adapt to it and implement it.

An enterprise's controllable price refers to the price at which an enterprise can independently determine its level under certain conditions. From an enterprise perspective, management accounting has the most practical significance in making such price analysis.

Pricing decision analysis mainly includes two parts: pricing decision method and pricing decision strategy.

I. Pricing Decision Analysis Methods and Types

Pricing decision-making method refers to the technical means for enterprises to make quantitative selection and analysis of specific prices according to certain procedures and models when making pricing decisions.

According to the main factors considered in the pricing decision, the pricing decision method can be divided into three types: cost-oriented pricing method, demand-oriented pricing method and special requirements-oriented pricing method.

(1) Cost-oriented pricing method, a cost-oriented pricing method, refers to a method of making pricing decisions based on concentrated consideration on how to achieve cost compensation.

(2) Demand-oriented pricing method. Demand-oriented pricing method refers to the method of making pricing decisions on the basis of giving priority to the relationship between supply and demand in the social market and the degree to which consumers may accept prices.

(3) Requirement-oriented pricing method, special requirements-oriented pricing method, refers to the method of making pricing decisions on the premise that the company fully meets other special requirements other than social needs or cost compensation.

Second, pricing decision strategies and types

The pricing decision strategy refers to the principles or techniques on which companies make final qualitative selection analysis based on certain experience when making pricing decisions, referred to as pricing strategy for short.

Pricing decision strategies mainly include flexible pricing strategies, new product pricing strategies, series product pricing strategies, psychological pricing strategies, and installment pricing strategies.

(1) Elastic pricing strategy refers to the principle or technique of determining the direction of price adjustment based on price elasticity. Price elasticity is also called the elasticity coefficient of the price that affects the quantity of demand, and it is also called the price elasticity of demand.

(2) New product pricing strategy refers to the principles or techniques used to guide the pricing of new products. There are two specific strategies: one is the skimming strategy and the other is the penetration strategy.

The former refers to the strategy of selling high-priced new products that have not yet formed competition for the first time to ensure a high initial profit, and gradually lowering prices as market sales increase and competition intensifies. Refers to the strategy of opening up the market for new products with lower prices, striving for customers, and gradually increasing prices after winning a competitive advantage.

(3) Pricing strategy for series products. Series products can refer to products with different packaging specifications, as well as products that are used in combination (such as cosmetics series). Differentiated pricing can be adopted for the former. Some small packages sell well, such as bagged shampoo; some large packages sell well, such as toothpaste. Proper price increases for these good-selling products. Two sets of prices can be specified for a set of goods: the set price and the unit price, the former should generally be lower than the sum of the latter, which can lead to a single transaction.

(4) Psychological pricing strategy refers to a type of pricing in which companies consider the psychological factors of consumers when buying, and deliberately set the price of the product higher or lower in order to induce consumers to purchase and expand market sales. Strategy, it is a combination of science and art of pricing. The enterprise determines the basic price according to the appropriate pricing method, but this price does not necessarily meet the consumer's psychology. Therefore, the basic price should be modified according to different consumer psychology, so as to formulate not only the enterprise's satisfaction but also the consumer Acceptable and reasonable price. Therefore, understanding consumers' psychology and flexibly using psychological pricing strategies are particularly important in corporate pricing. Of course, different companies and different consumer groups should have different psychological pricing strategies.

(5) The installment pricing strategy is applicable to the pricing of high-priced durable consumer goods, such as cars and housing. In the valuation, the price of each period of receipt should include deferred interest. Adopting this strategy can promote timely sales and avoid a large backlog of goods.

Third, the difference between pricing decision strategy and pricing decision method

The main differences between the two are as follows:

First, the nature is different. The pricing strategy belongs to qualitative analysis, and the pricing decision method belongs to quantitative analysis.

Second, the basis is different. The pricing strategy is mainly based on experience. The pricing decision method must rely on the pricing model.