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The Methodical Basis of Evaluation of the Company’s Pricing Processes

Journal: Herald of the Economic Sciences of Ukraine (Vol.41, No. 2)

Publication Date:

Authors : ;

Page : 156-160

Keywords : pricing processes; rate of prices changes; period of prices stability; calculating aspect of marginal pricing theory; effective boundaries of prices changes; indicator of the flexibility of an enterprise’s price mechanism;

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In the article, the author performs a task to estimate how the level of existing prices and their dynamics (stability, variability) meet the requirement of increasing enterprise's future cash flows which is the base of its value; and how to create additional cash flows by means of price maneuvering, enhancing in such a way the company's value. Tackling pricing of manufacturing companies this work has the following theoretical and methodical differences and advantages in compare with existing works. Pricing management is directed towards aims and ideology of strategic company management and towards agreement of current decisions with long-term goals; the prices become a tool of strategic company management, which is the most important for companies implementing the strategy of development. The pricing mechanism becomes orientated towards integral cost indicators as a basis for making price decisions. Hereby, the business management is enabled to take price-adjustment decisions with better potential of value increasing. The strategy of price flexibility implementing via regulation of current price fluctuation within some interval meets the requirement of non decreasing profitability rate of invested capital and allows striking the right balance between decisions concerning current and future cash flows and agreeing marketing decisions with financial consequences.

Last modified: 2022-04-27 01:06:35