Strategic Management Accounting

Strategic Management Accounting

Strategic Management Accounting

Part 1

Introduction

Most of the story in price has been operated as the major determinant of the purchase decision. However, in more recent decades, the non-price factors have become relatively more important in the behavior of the buyer's decision. Price is the only element of commercial combination that generates profits, though the other elements generate costs. Also, the price is one of the most flexible combinations of commercial, as may be modified in the short term, unlike the product and pipeline components.

Marketing mix strategy

The price is only a tool of the marketing mix that a company uses to achieve its marketing objectives. Pricing decisions should be coordinated with the decisions of design of products, distribution and promotion to form a program of marketing, consistent and effective.

Costs

The costs set the lower limit for the price the company can charge for your product. The company wants to charge a price that covers all costs, produce, distribute and sell the product and generate a fair return for their efforts and risk. Many companies try to adjust their prices close to cost , trying to compensate with their volume of sales , although analysis of each case whether it is in the application.

Organizational considerations

The management has to decide which part of the organization set prices. In enterprises girls, is common senior management drive prices. In larger companies, it is common responsibility of managers is own division or product line.

External Factors

Nature of the market and demand

If costs established the lower limit of price fixing, market and demand set the upper limit. The market in this case can be of various types, though deeper analysis of each of us diverts target's central work, you should name the main features of each.

•Purely competitive market i.e. the market consists of many buyers and many sellers, so no seller or buyer has a significant effect on both the price and volume of production. No salesman can sell above the price set as there would be demand for your product, and sellers do not charge less because they can sell all their output at the current price

•Market monopolistic competition i.e. many buyers and sellers who trade within a range of prices and not 1 only market price. This interval appears because who can differentiate their product sold.

•Oligopolistic market competition i.e. a few sellers is very sensitive to pricing strategies to implement its competitors.

•Market monopoly pure consists of one single vendor, are special cases in which the seller may be the government or a company of services. Prices are handled differently in each case. No analysis of this work is strictly know that how this type of market sets prices as they appear different regulations and price discrimination.

Demand in turn plays an important role, there is an index called elasticity of demand, and shows the change experienced by the demand to change its price. Demand is elastic when it undergoes a major change to vary the price and is said to ...