SMA Kristen Cilacap

One of the difficult decisions facing a company is setting prices. Although the setting of prices used the same for every company that is based on cost, competition, demand, and profits. But the optimum combination of factors these factors differ according to the nature of the product, market, and objectives.

According to Ricky W. and Ronald J. Ebert argued that: “Determination of the selling price is the process of determining what will received a firm in product sales “.

Company made a variety of pricing way. In small companies usually set prices by top management rather than by the marketing department. While the big companies pricing usually handled by the division managers and product lines. Even here top management is also set goals and general policies price fixing and providing approval of the proposed price of management below.

Mulyadi in his book states that: “In principle selling price should be able to cover the full cost plus a profit reasonable. Selling price equal to the cost of production plus a markup “.

Also Hansen & Mowen suggested that the “Price selling is the monetary amount charged by a business unit to the purchaser or customer for goods or services sold or submitted “.

From the definition above can be concluded that the sale price is some cost to the company to produce a good or service plus a profit percentage the company wanted, because it was to achieve a desired profit by the company one way you do to attract consumers is to determine the appropriate price for products sold. The right price is the price with a good product quality, and price can be give satisfaction to the consumer.

Boyd, Walker, and Laurreche in his book Marketing Management stated that: There are several ways in setting the prices, but any way that is used should taking into account situational factors. These factors include:

• The company’s strategy and other components in marketing mix.

• Expansion of the product so that the product is considered different from other products that compete in quality or the level of customer service.

• Cost and price competition.

• Availability and price of substitute products.

According to Philip Kotler in his book Management Marketing in Indonesia stated that: “Pricing is a problem if the company will set the price for the first time. This occurs when companies develop or acquire new products, when will introduce products into new distribution channels or new areas, as will bidding on a new labor agreement.

The definition explains that each company must decided where he will place the product on the basis of quality and price. In some markets such as the car market, as many as eight-point prices can be found.

The selling price is one factor that affects consumer decision to buy a product, consumers will buy a product if there is a balance between the reasons in set the selling price.

Sudarsono said that “In determining the selling price should consider several things, among others:

1. The cost of goods sold
2. The price of similar goods
3. Purchasing power
4. The turnover time of capital
5. The government’s regulation

These factors are objective factors. Means Personal income entrepreneurs or traders do not come into play, or even if there is only very small. Objective factors are sometimes sometimes not strong enough to be used as the basis for determining the price, so there are factors of subjective considerations.

In implementing pricing, based on the opinion Kotler 1996, the producers should pay attention to these things as follows:

1. Market Conditions:

In this case the producer must know the in-depth market conditions (monopoly or competition-free or anything else) that will enter, a competitor company including maps of the company and strengths / weaknesses competitors.

2. Product Price Competition

In determining the best price we must recognize that there is price competition in the market (price awareness) and the prices given to consumers. Usually prices on the market different from the price set for the end users. This is due to competitors’ strategies and other aspects of the competition with its customers. It is necessary for research into the field in the form of quantitative research and assisted with intelligent marketing.

3. Elasitas Demand and Quantity Demand

The definition with elasitas here is how far can known about the changes in demand that caused by changes prices. Beside that also indispensable consumer response to price changes associated with the use of the product itself. For example with the price reduction consumers will buy more or even not so buy, and vice versa. While other factors needed is a large Value is low price, Discounting, Odd pricing, Synchro pricing, penetration pricing, Value is everything I want in a service Prestige pricing, skimming pricing, Value is all that I get for all that I give Price framing, Price bundling, Value is the quality I get for the price I pay, Value pricing, Market Segmentation pricing.

4. Differentiation and Product Life Cycle.

To win the market the company’s product must be uniquely differentiated with competitor products. It is crucial to intelligently set the difference in a matter of price setting against competitors on aspects of quality, service and other crucial factors. The product’s positioning must also be set as it is associated with the time and the amount of sales. With the recognition and understanding about the manufacturing aspects condition in delivering the products to the market, it will be easier and convenient to determine the accurate pricing.

5. Other Crucial Factors.

Understanding the economic conditions that occurred during This and the estimated future that will happen is the key principal in an effort to know people’s purchasing power, in addition to estimating the political and security conditions.

In setting the price, producers can set with several alternatives such as below (Zeithaml & Bitner, 1996):

1. Cost Based Pricing

A pricing strategy of the oldest, where prices are determined based on cost per unit of product that came out plus with the expected benefits.

2. Competitors Based Pricing

Pricing performed using a competitors price reference, which in practice is more suitable untukproduk the standard oligopoly market conditions.

3. Customers Demand Based Pricing

The process of setting prices based on perceptions consumers against the received value (price value), sensitivity price and perceived quality. To determine the value of the price the quality, the analysis of Price Sensitivity Meter (PSM) is one form that can be used. In analysis These consumers are asked to give a statement in which consumer prices, too expensive, feels expensive and too expensive and is associated with acceptable quality.