Economic ManagementEconomic ManagementClass: GaMBA01. X0510-Group 3Class: GaMBA01. X0510-Group 3

TopicTopic: :

Defining prices for the Company’s products and Defining prices for the Company’s products and distinguish the price that Company applieddistinguish the price that Company applied

Group 3Group 3: : 1. TRƯƠNG TRUNG NGHĨA1. TRƯƠNG TRUNG NGHĨA

2. VŨ THANH NHUNG2. VŨ THANH NHUNG

3. NGUYỄN HỮU HOÀNG3. NGUYỄN HỮU HOÀNG

4. LÊ THỊ HOÀI THU4. LÊ THỊ HOÀI THU

5. NGUYỄN VIỆT HƯNG5. NGUYỄN VIỆT HƯNG

6. ĐINH KẾ ĐỨC6. ĐINH KẾ ĐỨC

7. NGUYỄN THÀNH LÝ7. NGUYỄN THÀNH LÝ

8. NGUYỄN PHƯƠNG NAM8. NGUYỄN PHƯƠNG NAM

9. ĐẶNG MINH TÂM9. ĐẶNG MINH TÂM

Contents1. PURPOSE OF PRODUCT PRICING AND SOME

METHODS OF PRODUCT PRICING.

2. PRODUCT PRICING METHOD OF TIEN SON VIGLACERA JSC

- General Introduction about Tien son Viglacera JSC

- The factors that impact product prices.

- Pricing for K612 product.

- Price discrimination 3. CONCLUSION

PURPOSE OF PRODUCT PRICING AND SOME METHODS OF PRODUCT PRICING.

1. PURPOSE OF PRODUCT PRICING

The most basic purpose of pricing is to determine target rate of pfofit. Pricing also aims to other three targets:

- First, to gain target market share.

- Second, to stable output and price

- Third, purpose is consistent with reply or comply with competition. 2. SOME METHODS OF PRODUCT PRICING.

- Pricing by a market trend.

- Pricing on expenditure.

PRODUCT PRICING OF TIEN SON VIGLACERA JSC

General introductions

The factors that impact product prices

Pricing for K612 product of Tien Son Viglacera JSC

General introduction

Tien Son Viglacera is the Join Stock Company, is doing business in producing granite flooring tile.

Company advocate to continually introduce distinctive products and reasonable pricing policy.

Exercise range give pricing for K612 product.

Factors affecting product price of the company

Constitutive expenditure of price.

Marketing and sales target.

Unit price decision.

Impact of market and external factors.

Constitutive expenditure of price

Provide the basis for pricing of product, including fixed cost and variable costs

Fixed cost:

Direct production costGeneral production costBusiness management costSelling costFinancial costs

Variable costs:Cost of direct material.Salary cost for all officials and employees.

Marketing and sales target Maximize sales (The

maximum consumption of products made in the period) as MR>MC.

Maximize sales for new products MR=MC.

Affirm products level.

Broadcast trade mark and expand market share.

Pring part and pricing method Company leaders who decide the price. Sale Department offers price range on the basis of

Company leaders’ policy and price target. Pricing at cost plus – Plus an amount or percentage of

the cost of products

Plus percentage depending on specific customer group.

Price = (Total cost/a product unit)*(1+profit rate)-K; K is applied to big agents have high sales, may be discounts or promotions and price discrimination.

Product descriptionProduct image

Is new product line: high quality, high value

Appreciated by the market with natural vein, bright colors.

Outstanding durability, shine,...

Product name: Fine grained product

Product code: K612

Size: 12x600x600(cm)

Cost of a product unit

Other affected factorsDemand curve: The price is inelastic

because the product is new and high quality, customers are those with high incomes

Competition: Import from China; Companies as Dong Tam, Taicera have not produced yet and mainly exported; Alternative product: natural wood, stone with high price; low-qulity ceramic tiles are not affected much.

Market: Advantage of scale and experience, market leader of K612 product. Market accepted and appreciated products. Product needs are tended to rise.

Grouping customers North: Main market, lower transport cost, products

are suitable to taste, difficult to join the industry, substitutes for less.

Middle, South: higher transport cost, many advanced construction, many substitutes, easy to join the industry.

Construction: suitable to taste, high after sales costs, inelastic demand on price

export: Unsuitable to taste, many substitutes, to join the industry easily, strongly elastic demand on price.

The sum pricing

K612 product

Price = C x (1+ %r) – K (đồng/m2 ). K :depends on sales/agents plan, may be discountance, promotion or price discrimination

No Region

Cost Z (đồng/m2)

Profit factor %r

Discount agents K Price

(đồng/m2)Sale target

1 North 123.286 30 K 160.272-K Maximize profit

2 Construction 123.286 35 K 166.436-K Maximize profit

3 Middle 123.286 10 K 135.615-K Expand market share

4 South 123.286 10 K 135.615-K Expand market share

5 Export 123.286 5 K 129.450-K

Maximize sales, foreign currency to import raw

materials and fuels

K FactorK factor consist of 2 parts: Discount, promote when exceed sales allotment.

Price discrimination.

No Exceeded sale levels/Plan

(%) Discount or promote after converting K

(đồng/M2)

1 Từ 1-5% 500

2 Từ 5-10% 1000

3 Từ 10-20% 1500

4 Trên 20% 2000

Price discrimination product Granite tiles of Tien son

Viglacera Join Stock CompanyPrice = C x (1+ %r) – K

(A K value is to disciminate price)

Level 1 pricing discrimination. Negotiate a price for per agent to gain max profit.

Level 2 pricing discrimination. Different pricing for different orders especially large cargo. Usually applied at the time of Tet and in rainy season when selling slowly.

Price discrimination product Granite tiles of Tien son

Viglacera Join Stock Company

Level 3 pricing discrimination.Pricing discrimination on regions, for each region

a different price with enough geographic distance (including export) not to sell to each other’s markets, each region has a different sale target.

pricing discrimination to time.When making new distinct products on the

market, can sell with high price until the product saturated.

Kết luận Tien son Viglacera Join Stock Company apply method

of determining cost plus percentage of profits. In addition, associating with internal and external effected factors, company make the optimal price.

With the prcing and price discrimination, Tien son Viglacera JSC developed rapidly from 3 millions m2/year to 6 millions m2/year now, profit is 45 million/500 million of sales accounted for 30% of consumption in Viet nam and company has oriented development in 2015 be 15 million m2/ year accounted 50% of Granite consumption in Viet nam.

That is remarkable success of pricing policy, mechanism of price discrimination based on impact factors and reasonable caculation elements of cost profit rate and customer privilege mechalism, increase sales, maximize profit, develop market and trade mark of Tien son Viglacera JSC

Thankyou please! Good luck to you!