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Competition oriented pricing method of network marketing

Source: Shangpin China | Type: website encyclopedia | Time: 2015-06-18
Competition oriented pricing refers to the pricing method by which an enterprise determines the price of goods based on its own competitive strength, reference cost, supply and demand by studying the price level, production conditions, service conditions and other factors of its competitors. The specific approach is: when setting the price, the enterprise mainly bases on the price of competitors and maintains a certain proportion with the price of competitive products. When the price of competitive products remains unchanged, the original price should be maintained even if the product cost or market demand changes Website construction outsourcing When the product price changes, even if the product cost and market margin remain unchanged, the price should be adjusted accordingly. In online marketing, there are currently three pricing methods based on competition:

1. Follow the market pricing method

The market pricing method, also known as the popular level pricing method, is characterized by maintaining the price of a product of the enterprise at the average market price level, and using such price to obtain average remuneration. When the product features of the enterprise are not obvious, and the enterprise does not intend to compete with competitors at a low price, this pricing method is generally more stable, and it is widely used in the real estate industry. An enterprise can determine a product slightly higher than its competitors' products according to the difference between its own products and competitors' products A price slightly lower or similar to the price of a competitor's product. In addition, by adopting the market pricing method, enterprises do not have to fully understand consumers' responses to different price differences, thus saving a lot of time for marketing personnel and pricing personnel.

2. Sealed bid pricing method

The sealed bid pricing method is mainly used for bidding transactions. The bid price is determined by the bidding enterprise according to the quotation estimate of competitors, not according to its own cost or market demand. When bidding, the enterprise should consider both the target profit of the enterprise and the probability of winning the bid. Generally speaking, enterprises offer high prices and large profits, but the probability of winning the bid is small. If the enterprise incurs bid invitation due to high quotation, the profit will be zero; On the contrary, if the quotation is low, although the probability of winning the bid is high, the profit is low, and its opportunity cost may be higher than that of other investment directions. The biggest difficulty for enterprises to use this method is to estimate the probability of winning the bid. As it involves mastering the bidding situation of competitors, enterprises can only roughly estimate through market research and analysis of bidding materials. Therefore, the sealed bid pricing method is very challenging for enterprises. For example, if the buyer wants to purchase a batch of electronic equipment, it will publish an advertisement or send a letter on the Internet, stating the requirements for the type, quantity, specification, etc. of the equipment to be purchased, and inviting the seller to bid within the specified time limit. The buyer shall open the bid within the specified time, select the seller with the lowest quotation and the most favorable price to conclude the transaction, sign the purchase contract and conclude the transaction.

3. Auction pricing method

Auction pricing method refers to a pricing method in which the auction house is entrusted by the seller to sell goods at a specific place, guide the buyer to quote, and use the buyer's psychology of competition and purchase to choose the highest price for selling goods. At present, many companies have made useful attempts online, such as eBay, Taobao, etc. The difference between auction pricing and bid pricing is that the former is the buyer's open bidding, and the latter is the seller's sealed pricing.

In a word, in online marketing, enterprises should focus on customers, consider from the perspective of customers when setting prices, test customers' evaluation of various values provided by enterprises, and price according to customers' psychological expectations of the value. At the same time, the increasing transparency of market information has also intensified the fierce competition between enterprises, so the cost oriented pricing method is in a gradually weakened position, and demand oriented pricing method and competition oriented pricing method have become the main pricing methods.
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