Market factors affecting the level of prices of machinery and equipment
Most of the production of machinery, machinery, equipment and vehicles is realized in the conditions of the oligopolistic competition market.
This type of market is characterized by a small number of large and medium-sized producers, limited control over prices in the absence of collusion by large producers. In addition, the penetration of new manufacturers to the market meets significant resistance from the functioning of the facilities. The market is dominated by non-price competition.
In engineering, the level of prices is determined by the costs associated with the production and sale of products. At the same time, the costs of production and circulation affect the competitive price of machines only to the extent that they affect the supply on the market. The price should compensate the total costs of production and circulation, in other words, the full cost price, and provide business profits.
To a lesser extent in engineering, the costs of production and circulation affect the prices of mass-produced goods in the industry, such as tools, technological equipment, vehicles.
The economic policy pursued by the government has a significant impact on the production of machine-building, with regard to state regulation of prices, taxation, customs duties.
Due to the large-scale international cooperation of machine-building industries, the change in the exchange rate becomes especially important. Thus, with the depreciation of the national currency, with devaluation, exporting enterprises have the opportunity to reduce prices for exported goods, which increases the competitiveness of engineering products exported.
With the appreciation of the national currency, revaluation, on the contrary, the competitiveness of exported products is reduced. In the domestic market, the depreciation of the national currency leads to an increase in prices for imported products and, as a result, to a general increase in prices in the country.Non-price competition characteristic of the market for machine-building products means competition in the quality of products, in its novelty and unique properties, in design, in functionality, in the perfection of technology, in the level of after-sales service, in sales organization, etc.
Pricing factors that directly depend on the manufacturer of machinery and equipment, such as the quality of products, the stage of the life cycle of an engineering product, the channel for the promotion of goods on the market, contractual relations with suppliers and consumers, and others, allow prices to be adjusted in accordance with the price policy.
Features of machinery and equipment as a product also have an impact on the pricing process. Thus, a significant part of machines and equipment, for example, machine tools, construction equipment, power equipment, are classified as goods for production and technical purposes, which determines the demand for these products from the development of the industries in which they are used. Machines and equipment are the objects of long-term use, respectively, for the consumer value is not only the price, but also a set of operational characteristics that ensure their reliability, energy intensity, durability, environmental friendliness, etc. In addition, machines and equipment are characterized by a different degree of universality, in this connection, depending on the range of use, machines and equipment are divided into universal, used in different industries, specialized, designed for a smaller circle of consumers, special and unique, manufactured and completed by individual orders.
The degree of universality directly affects the methods of pricing used and the channels of commodity circulation. Among other features of machinery and equipment as goods, it is worth noting the widely practiced pre-sale and warranty service, the acquisition of equipment and spare parts, transportation to the place of operation, as well as the supplier's installation and commissioning work, engineering as a form of training for personnel who will operate the machinery. The cost of these works and services, of course, also affects the price.
The availability of a well-known trademark for engineering products provides a significant increase in prices.
High prices can be determined by the availability of fundamentally new functionality in the machines, or, for example, by providing a high level and a long period of after-sales service.
Evaluation of demand for engineering products is the most important stage of pricing. At this stage, the demand for a product and effective demand for it are determined, as well as the market capacity and potential sales volume.
Methods for calculating the volume of demand are different for machine-building products of mass demand, such as cars, tools, and production-engineering products, such as machines, power machines and equipment.
The next step is the procedure for determining the lower level of product prices, while simultaneously analyzing the enterprise's capabilities in the field of price changes and competitive struggle in the market segment of similar machines, which will require a comparative analysis of prices and technical characteristics of competitors' products.
The study of products manufactured by competitors and the prices for it is necessary for the company to be able to objectively assess its position in the market and adjust prices for products. If the products of the enterprise in terms of their consumer properties and quality exceed those of competitors, prices can be increased, and, of course, vice versa.
To obtain information about the prices and quality of competitors' products, comparative purchases of competitors' goods are made for comparison of qualities and prices, price lists of competitors are studied, consumer surveys are conducted on the quality of competitors' products.
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