2019/11/29
As we all know, the price of products is directly linked to corporate profits, and for home building materials businesses, setting a price strategy has become a top priority for testing decision makers of major enterprises. With the rise in the price of raw materials and the increase in transportation costs, the call for price increases in the home building materials industry has also become higher. As for the price increase strategy and related issues, wardrobe companies need to be cautious.
What causes the rise in raw material prices?
Since 2013, raw material prices have continued to fall. The effect of de-capacity is prominent, and low-end and high-energy-capacity production is restricted or even suspended, which leads to a psychological feeling that the short-term supply-demand relationship is tightening; and the increase in logistics costs has also contributed to the flames; therefore, there is a periodic and periodic rebound in demand for raw material prices. This is normal market behavior and should not be interpreted excessively. Regarding this round of rising raw material prices, market research institutions generally believe that it is mainly driven by the rising commodity futures index and driven by the capital market; industry insiders believe that the factors affecting prices are various. Rising raw materials is not a sufficient condition to promote the price of furniture and building materials, but it must be one of the necessary conditions. Studying from multiple levels of macroeconomics, mesoeconomics, and microeconomics, the short-term surge in prices is not enough to explain the long-term trend of China's economy. As for the causes and effects of short-term sharp fluctuations in raw material prices, wardrobe companies must wait and see how they change, and not follow the trend blindly.
Enterprise pricing needs to consider whether product prices can support value
Value determines price, and price is the currency expression of value. The enlightenment given to the principles of economics or marketing is that corporate pricing is a systematic project, including its own pricing procedures and pricing strategies. Price strategy is a major factor directly related to corporate profits or profitability, so it is particularly important. In a broad sense, it will affect the production and development of household enterprises. Appropriate price strategy will win the market, generate sufficient profit space and record greater profits. If the price strategy fails, and from a small point of entry, it will affect product demand and cause sales to decline. Therefore, enterprises must first consider whether product prices can support value when pricing.
Second, enterprises must make overall consideration and make careful decisions on the factors that affect prices, such as corporate goals, market position, brand positioning, user groups, competition strategies, cost control, technological level, patented technology, channel strategies, shareholder needs, and so on. The main factors affecting corporate pricing are divided into market demand and changes, market competition, the degree of government and stakeholder intervention, commodity attributes, and corporate conditions. It is unscientific to adjust prices at will based on short-term price fluctuations of raw materials alone. Enterprises should have different strategic arrangements at different stages, and choose a pricing method and pricing strategy that is more conducive to achieving goals according to different purposes.
With the advancement of science and technology and the further improvement of national living standards, the proportion of household products in household living expenses has increased significantly, and its configuration has become an organic part of family life. If the company cannot obtain sustainable profitability and sustainable development, then the company lacks the stamina for development, and its high-level R & D is just like seeking a fish. Therefore, in terms of pricing, enterprises should consider the strategic needs of demand-oriented and competition-oriented, and cost-oriented is second.
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