1.

INTRODUCTION OF FIELD WORK

1.1 INTRODUCTION Pricing policy refers to the policy of setting the price of the product or products and services by the management by taking into account of various internal and external factors, forces and its own business objectives. Pricing policy basically depends on price theory that is the corner stone of economic theory. Pricing is considered as one of the basic and central problems of economic theory in a modern economy. Fixing prices are the most important aspect of managerial decision making because market price charged by the company affects present and future production plans, pattern of distribution, nature of marketing etc. The Pricing policy defined as Standard procedure used by a firm to set wholesale and retail prices for its products or services. To establish a selling price for a product The present field work is to known in what manner the management of the organization decides the price of the product at following industry 1.2 RESEARCH Researchers Students would like to know .. with reference to following industry ... 1.3 OBJECTIVES OF THE FIELD WORK 1. To find the existing Pricing Policy in the company. 2. To find out the factors affecting on Pricing Policy in the company 3. To Find benefits of Pricing Policy to organization. 4. To Propose remedy for enriching Pricing Policy to organization.

1.4 SCOPE OF THE FIELD WORK The scope of the Field work is as follows. Geographical Scope: - The Field work is confined to following industry Pvt. Ltd. Satara. Maharashtra Conceptual Scope: - The present Field work of Pricing Policy. Encompass the introduction, definition, functions of Pricing Policy, characteristics, types of Pricing Policy.

Analytical Scope: - The collected data analyzed by using some techniques. 1.5 IMPORTANCE OF THE FIELD WORK A Field work on Pricing Policy plays a very important & vital role in the development of Organization in the way of increasing the productivity & development with the help of expansion of Organization. Pricing Policy useful to identify how much profit you can make through the production as well as pricetargeting strategies. This Field work also provides relevant information to the management & owner, about desirable standard of Pricing Policy. That Field work gives new idea about Pricing Policy. Due to that facilities management give support to price determination. 1.6 RESEARCH METHODOLOGY 1.6.1 Research method:-For this Field work Research on Pricing Policy includes to the following industry in Satara. For getting information a structure of schedule was developed to collect data & for research use descriptive inferential type of research method. 1.6.2 Data required:-Data regarding to conceptual Framework, company profile, Production details, Factors affecting Pricing Policy, etc is required. 1.6.3 Data Source:- Data collection means, collection of information through various sources, these are observation, schedule, survey, websites & books etc. There are two types of data- Primary data and Secondary data. A) Primary data:- For this research work, primary data like satisfaction level of employees collected through observation, interview, and schedule. The basic information about Pricing Policy in all industry in Satara is collected by visiting the industry. B) Secondary data:- Secondary data like company profile; conceptual framework is collected through books, company annual report, library books, magazines, websites, Official record, some information about the factors which affecting on Pricing Policy were be used as secondary source of information. 1.6.4 Instrument: - For the collection of primary data schedule are prepared. It consist some Table, open & close-ended questions which help to collect the information about Pricing Policy. 1.6.5 Sampling:- The researcher selects 1 samples for the Field work in each organization. For the selection of sample size disproportion stratified convenient sampling method about the product was used. 1.6.6 Type of Research:- The research is Descriptive inferential type of research. 1.6.7 Data Analysis: - The primary and secondary data collected through some techniques. The collected data analyzed by using some techniques.

1.7 LIMITATION OF FIELD WORK 1. It was impossible to go in depth & collect information regarding all aspects of Pricing Policy.

2. PROFILE OF THE ORGANISATION

2.1 INTRODUCTION OF ORGANISATION 2.2 LOCATION DETAILS OF ORGANISATION 2.3 OBJECTIVE OF ORGANISATION 2.4 PRODUCT OF ORGANISATION2.5 CUSTOMERS OF ORGANISATION2.6 COST OF PRODUCTION OF PRODUCT IN THE ORGANISATION2.7 MARKET SCOPE OF THE PRODUCT-

3. CONCEPTUAL FRAMEWORK
3.1 INTRODUCTIONPricing policy refers to the policy of setting the price of the product or products and services by the management by taking into account of various internal and external factors, forces and its own business objectives. Pricing policy basically depends on price theory that is the corner stone of economic theory. Pricing is considered as one of the basic and central problems of economic theory in a modern economy. Fixing prices are the most important aspect of managerial decision making because market price charged by the company affects present and future production plans, pattern of distribution, nature of marketing etc. Above all, the sales revenue and profit ratio of the producer directly depend upon the prices. Hence, a firm has to charge the most appropriate price to the customers. Charging a price which is neither too high nor too low would depend on a number of factors and forces. There are no standard formulas or equations to fix the best possible price for a product. The dynamic natures of an economy force a firm to raise and reduce the prices continuously. Hence prices fluctuate over a period of time. In economic theory, we take into account of only two parties i.e. buyers and sellers while fixing the prices. However, in practice many parties are associated with pricing of a product. They are rival, competitors, potential rival, middlemen, wholesalers, retailers, commission, agents and above all the Government. Hence we should give due consideration to the influence exerted by these parties in the process of price determination.

3.2 DEFINITION PRICING POLICYThe Pricing policy defined as Standard procedure used by a firm to set wholesale and retail prices for its products or services. To establish a selling price for a product

3.3 OBJECTIVES OF PRICING POLICYThe following objectives are to be considered while fixing the prices of the product. 1. Profit maximization in the short term The primary objective of the firm is to maximize its profits. Pricing policy as an instrument to achieve this objective should be formulated in such a way as to maximize the sales revenue and profit. Maximum profit refers to the highest possible of profit. In the short run, a firm not only should be able to recover its total costs, but also should get excess revenue over costs. This will build the morale of the firm and instill the spirit of confidence in its operations. It may follow skimming price policy, i.e., charging a very high price when the product is launched to cater to the needs of only a few sections of people. It may exploit wide opportunities in the beginning. But it may prove fatal in the long run. It may lose its customers and business in the market. Alternatively, it may adopt penetration pricing policy i.e., charging a relatively lower price in the latter stages in the long run so as to attract more customers and capture the market. 2. Profit optimization in the long run The traditional profit maximization hypothesis may not prove beneficial in the long run. With the sole motive of profit making a firm may resort to several kinds of unethical practices like charging exorbitant prices, follow Monopoly Trade Practices (MTP), Restrictive Trade Practices (RTP) and Unfair Trade Practices (UTP) etc. This may lead to opposition from the people. In order to over come these evils, a firm instead of profit maximization, aims at profit optimization. Optimum profit refers to the most ideal or desirable level of profit. Hence, earning the most reasonable or optimum profit has become a part and parcel of a sound pricing policy of a firm in recent years. 3. Price Stabilization Price stabilization over a period of time is another objective. The prices as far as possible should not fluctuate too often. Price instability creates uncertain atmosphere in business circles. Sales plan becomes difficult under such circumstances. Hence, price stability is one of the pre requisite conditions for steady and persistent growth

of a firm. A stable price policy only can win the confidence of customers and may add to the good will of the concern. It builds up the reputation and image of the firm. 4. Facing competitive situation One of the objectives of the pricing policy is to face the competitive situations in the market. In many cases, this policy has been merely influenced by the market share psychology. Wherever companies are aware of specific competitive products, they try to match the prices of their products with those of their rivals to expand the volume of their business. Most of the firms are not merely interested in meeting competition but are keen to prevent it. Hence, a firm is always busy with its counter business strategy. 5. Maintenance of market share Market share refers to the share of a firm's sales of a particular product in the total sales of all firms in the market. The economic strength and success of a firm is measured in terms of its market share. In a competitive world, each firm makes a successful attempt to expand its market share. If it is impossible, it has to maintain its existing market share. Any decline in market share is a symptom of the poor performance of a firm. Hence, the pricing policy has to assist a firm to maintain its market share at any cost. 6. Capturing the Market Another objective in recent years is to capture the market, dominate the market, command and control the market in the long run. In order to achieve this goal, sometimes the firm fixes a lower price for its product and at other times even it may sell at a loss in the short term. It may prove beneficial in the long run. Such a pricing is generally followed in price sensitive markets. 7. Entry into new markets. Apart from growth, market share expansion, diversification in its activities a firm makes a special attempt to enter into new markets. Entry into new markets speaks about the successful story of the firm. Consequently, it has to bear the pioneering and subsequent risks and uncertainties. The price set by a firm has to be so attractive that the buyers in other markets have to switch on to the products of the candidate firm. 8. Deeper penetration of the market The pricing policy has to be designed in such a manner that a firm can make inroads into the market with minimum difficulties. Deeper penetration is the first step in the direction of capturing and dominating the market in the latter stages.

9. Achieving a target return A predetermined target return on capital investment and sales turnover is another long run pricing objective of a firm. The targets are set according to the position of individual firm. Hence, prices of the products are so calculated as to earn the target return on cost of production, sales and capital investment. Different target returns may be fixed for different products or brands or markets but such returns should be related to a single overall rate of return target. 10. Target profit on the entire product line irrespective of profit level of individual products. The price set by a firm should increase the sale of all the products rather than yield a profit on one product only. A rational pricing policy should always keep in view the entire product line and maximum total sales revenue from the sale of all products. A product line may be defined as a group of products which have similar physical features and perform generally similar functions. In a product line, a few products are regarded as less profit earning products and others are considered as more profit earning. Hence, a proper balance in pricing is required. 11. Long run welfare of the firm A firm has multiple objectives. They are laid down on the basis of past experience and future expectations. Simultaneous achievement of all objectives are necessary for the over all growth of a firm. Objective of the pricing policy has to be designed in such a way as to fulfill the long run interests of the firm keeping internal conditions and external environment in mind. 12. Ability to pay Pricing decisions are sometimes taken on the basis of the ability to pay of the customers, i.e., higher price can be charged to those who can afford to pay. Such a policy is generally followed by those people who supply different types of services to their customers. 13. Ethical Pricing Basically, pricing policy should be based on certain ethical principles. Business without ethics is a sin. While setting the prices, some moral standards are to be followed. Although profit is one of the most important objectives, a firm cannot earn it in a moral vacuum. Instead of squeezing customer, a firm has to charge moderate prices for its products. The pricing policy has to secure reasonable amount of profits to a firm to preserve the interests of the community and promote its welfare.

3.4 IMPORTANT OF LABOUR WELFARE1.It helps to the development of Organization in the way of increasing the productivity & development 2.It helps the expansion of Organization. 3.To identify how much profit you can make through the production 4.It helps the formatting price-targeting strategies.

3.5 CLASSIFICATION FACTORS WHICH OF PRICING POLICYIn a broader sense the various factors that affect the price are divided into two categories. They are as follows: External Factors:1) Demand, supply and their determinants. 2) Elasticity of demand and supply. 3) Degree of competition in the market. 4) Size of market. 5) Good will, name, fame and reputation of a firm in the market. 6) Trends in the market. 7) Purchasing power of the buyers. 8) Bargaining power of the customers. 9) Buyer behavior in respect to a particular product. 10) Availability of substitutes and compliments. 11) Governments policy relating to various kinds of incentives, disincentives, controls and restrictions. 12) Regulations, licensing, taxation, export and import, foreign aid, foreign capital. 13) Foreign technology, MNCs. 14) Competitors Pricing Policy. 15) Social Consideration. Internal Factors: 1) Objectives of Firm. 2) Production Costs. 3) Quality of product and its characteristics. 4) Scale of production. 5) Efficient management of resources. 6) Policy towards percentage of profits and dividend distribution. 7) Advertising and sales promotion policies.

8) Wage policy and sales turn over policy. 9) Stages of the product on the product life cycle. 10) Use pattern of the product. 11) Extent of distinctness of the product and extent of product differentiation practices by the firm. 12) Composition of the product and life of the firm. Thus, multiple factor and forces affect the pricing policy of a firm. 3.6 TYPES OF PRICING POLICYCost-Plus Pricing Many manufacturers uses cost-plus pricing. The key to being successful with this method is making sure that the "plus" figure not only covers all overhead but generates the percentage of profit you require as well. If your overhead figure is not accurate, you risk profits that are too low. The following sample calculation should help you grasp the concept of cost-plus pricing: Cost of materials + Cost of labor + Overhead = Total cost + Desired profit (20% on sales) = Required sale price Demand Price Demand pricing is determined by the optimum combination of volume and profit. Products usually sold through different sources at different prices--retailers, discount chains, wholesalers, or direct mail marketers--are examples of goods whose price is determined by demand. A wholesaler might buy greater quantities than a retailer, which results in purchasing at a lower unit price. The wholesaler profits from a greater volume of sales of a product priced lower than that of the retailer. The retailer typically pays more per unit because he or she are unable to purchase, stock, and sell as great a quantity of product as a wholesaler does. This is why retailers charge higher prices to customers. Demand pricing is difficult to master because you must correctly calculate beforehand what price will generate the optimum relation of profit to volume. Rs50.00 30.00 40.00 Rs120.00 30.00 Rs150.00

Competitive Pricing Competitive pricing is generally used when there's an established market price for a particular product or service. If all your competitors are charging Rs100 for a replacement windshield, for example, that's what you should charge. Competitive pricing is used most often within markets with commodity products, those that are

difficult to differentiate from another. If there's a major market player, commonly referred to as the market leader that company will often set the price that other, smaller companies within that same market will be compelled to follow. To use competitive pricing effectively, know the prices each competitor has established. Then figure out your optimum price and decide, based on direct comparison, whether you can defend the prices you've set. Should you wish to charge more than your competitors, be able to make a case for a higher price, such as providing a superior customer service or warranty policy? Before making a final commitment to your prices, make sure you know the level of price awareness within the market. If you use competitive pricing to set the fees for a service business, be aware that unlike a situation in which several companies are selling essentially the same products, services vary widely from one firm to another. As a result, you can charge a higher fee for a superior service and still be considered competitive within your market. Markup Pricing Used by manufacturers, wholesalers, and retailers, a markup is calculated by adding a set amount to the cost of a product, which results in the price charged to the customer. For example, if the cost of the product is Rs100 and your selling price is Rs140, the markup would be 40. To find the percentage of markup on cost, divide the dollar amount of markup by the dollar amount of product cost: Rs40? Rs100 = 40% This pricing method often generates confusion--not to mention lost profits--among many first-time smallbusiness owners because markup (expressed as a percentage of cost) is often confused with gross margin (expressed as a percentage of selling price). The next section discusses the difference in markup and margin in greater depth.

4. NATURE OF COLLECTING DATA

4.1 INTRODUCTION

The data after collection is processed and analyzed in accordance with the purpose of research through schedule and other way. The data should be processed so as to interpret the results and to draw the conclusions. Analysis of data is an important part of research. The data analysis should be done in a proper manner. The present Field work is about pricing policy in following five companies. The research is about pricing policy. The primary data is collected through schedule. The research tools used for data analysis are tables.

5. DATA ANALYSIS, INTERPETATION AND OBSERVATION

5.1 INTRODUCTION . Analysis of data is an important part of research. The data analysis should be done in a proper manner. The present Field work is about pricing policy in following five companies. The research is about pricing policy. The primary data is collected through schedule. The research tools used for data analysis are tables. 5.2 DATA ANALYSIS AND INTERPRETATION OF DATA This data was analyzed using various analytical and statistical tools so as to Field work the opinions of Managers about present Pricing policy in the organization. 5.2.1 Company Name & Products

5.2.2 Products detail 5.2.3 Price

5.2.4. Analysis of Factors affecting on pricing:-

Internal Factors affecting on pricing:-

Internal Factors Product Production Cost Objective of Firm Product Quality Product Characteristics Scale of Production Policy towards percentage of profits Profit ratio of Product Policy towards percentage of dividend distribution. Advertising and sales promotion policies. Wage policy Sales turn over policy. product life cycle Use of Product Composition of the product and life of the firm. Product Size After seals service of Product Location of production

Yes

No

External Factors affecting on pricing:-

External Factors Product Demand Product Supply Product determinants. Elasticity of demand and supply. Product Competitors in market Competitors Pricing Policy. Availability of substitutes and compliments. Location of Market Size of Market Good will, Brand name, and reputation of a firm and Product in the market. Trends in the market. Product Customer Income level of buyer Purchasing power of Customer Bargaining power of the customers. Customer Age Customer Gender Customer Status Customer behavior in respect to a particular product. Governments policy relating to various kinds of incentives, disincentives, controls and restrictions. Regulations, licensing, taxation, export and import, foreign aid, foreign capital. Foreign technology, MNCs. Social Consideration.

Yes

No

6. FINDINGS
6.1 INTRODUCTION This chapter includes findings which are drawn by researcher on the basis of data analysis and interpretation. It includes Information related to Pricing policy adopted by Companies. 6.2 FINDINGS Researcher has collected data required to fulfill objectives of the Field work through 6.2.1General Findings These tables show Internal Factors & Internal Factors which are affected on Pricing Policy in organization. Internal Factors Product Production Cost Objective of Firm Product Quality Product Characteristics Scale of Production Policy towards percentage of profits Profit ratio of Product Policy towards percentage of dividend distribution. Advertising and sales promotion policies. Wage policy Sales turn over policy. product life cycle Use of Product Composition of the product and life of the firm. Product Size After seals service of Product Location of production External Factors Product Demand Product Supply Product determinants. Elasticity of demand and supply. Product Competitors in market Competitors Pricing Policy. Availability of substitutes and compliments. Location of Market Size of Market Good will, Brand name, and reputation of a firm and Product in the market. Trends in the market. Product Customer Income level of buyer Purchasing power of Customer Bargaining power of the customers. Customer Age Customer Gender Customer Status Customer behavior in respect to a particular product. Governments policy relating to various kinds of incentives, disincentives, controls and restrictions. Regulations, licensing, taxation, export and import, foreign aid, foreign capital. Foreign technology, MNCs. Social Consideration. schedule.

6.2.2

Specific Findings

7. CONCLUSION
5.1 INTRODUCTION

This chapter includes conclusion. It related to following five organization.. CONCLUSION Fixing prices are the most important aspect of managerial decision making because market price charged by the company affects present and future production plans, pattern of distribution, nature of marketing etc. Above all, the sales revenue and profit ratio of the producer directly depend upon the prices. Hence, a firm has to charge the most appropriate price to the customers. Charging a price which is neither too high nor too low would depend on a number of factors and forces. Pricing decision is valuable decision of any organization. Pricing policy covers a broad field and helps development of Company. The simplest way to set price is through uniform pricing. At the profit-maximizing uniform price, the incremental margin percentage equals the reciprocal of the absolute value of the price elasticity of demand. The most profitable pricing policy is complete price discrimination, where each unit is priced at the benefit that the unit provides to its buyer. To implement this policy, however, the seller must know each potential buyers individual demand curve and be able to set different prices for every unit of the product. The next most profitable pricing policy is direct segment discrimination. For this policy, the seller must be able to directly identify the various segments. The third most profitable policy is indirect segment discrimination. This involves structuring a set of choices around some variable to which the various segments are differentially sensitive. Uniform pricing is the least profitable way to set a price. As per the Field work we observe that following 5 companies consider various factors to the adopting pricing policy. Some Internal Factors take in to consideration such as . In External Factors ..are take in to consideration. There fore there is necessity of making some provision for improving the Pricing policy. It leads to improve per again favorable affects of profitability and products of the organization.

8. SUGGESTION
5.1 INTRODUCTION

This chapter includes suggestions which on the basis of data analysis, interpretation, Findings, conclusion related to adopted by following five organization. The suggestions proposed by researcher would be helpful to improve the present Pricing policy in organization. all

SUGESIONS Researcher has studied the concept of Pricing policy and researcher has derived findings also researcher has located some loopholes and proposed suggestions which would be useful to plug the loopholes. Following are the suggestions for effectiveness of the Pricing policy 5.3.1 General Suggestions 5.3.2 Specific Suggestions

ANNEXURE QUESTIONNAIRE

A. PERSONAL INFORMATION
1. Name 2. Age 3. Sex 4. Company Name 5. Company Address 6. Products 7. Products detail 8. Price :::- Male / Female. :::::-

B. PRODUCT PRICING INFORMATION

1. How you adopt pricing policy?

2. Following factor can affect on pricing? :-

Internal Factors Product Production Cost Objective of Firm Product Quality Product Characteristics Scale of Production Policy towards percentage of profits Profit ratio of Product Policy towards percentage of dividend distribution. Advertising and sales promotion policies. External Factors Wage policy Product Demand Sales turn over policy. Product Supply product life cycle Product determinants. Use demand and Elasticity of of Product supply. Composition of the product and life of the firm. Product Competitors in market Competitors Pricing Policy. Product Size Availabilityseals service of Product After of substitutes and compliments. Location of Market Location of production Size of Market Good will, Brand name, and reputation of a firm and Product in the market. Trends in the market. Product Customer Income level of buyer Purchasing power of Customer Bargaining power of the customers. Customer Age Customer Gender Customer Status Customer behavior in respect to a particular product. Governments policy relating to various kinds of incentives, disincentives, controls and restrictions. Regulations, licensing, taxation, export and import, foreign aid, foreign capital. Foreign technology, MNCs. Social Consideration.

Yes

No

Yes

No

BIBLIOGRAPHY

1)