Breaking news

Although it is useless … Why I am satisfied with collecting “mere iron bars” that cost more than 100,000 yen Do not think of the price of the product from the “cost price” | PRESIDENT Online (President Online)

Although it is useless … Why I am satisfied with collecting “mere iron bars” that cost more than 100,000 yen Do not think of the price of the product from the “cost price” | PRESIDENT Online (President Online)
Although it is useless … Why I am satisfied with collecting “mere iron bars” that cost more than 100,000 yen Do not think of the price of the product from the “cost price” | PRESIDENT Online (President Online)

What is the “fair price” of a product? Mr. Yuji Kosaka, who is familiar with marketing, says, “Prices should not be decided based on the cost price or purchase price. What is important is how much value the customer perceives in the product.”

*This article is a partial re-editing of Yuji Kosaka’s “Marketing in the Age of ‘Rising Prices'” (PHP Business Shinsho).

Photo by iStock.com/Elena Goncharova

※The photograph is an image

Although-it-is-useless-Why-I-am-satisfie

Determining the price from the cost is outdated

What criteria do you use when deciding the price of an item?

The most common pricing method is probably “determine based on cost and purchase price”.

If you are a manufacturer, set the manufacturing cost rate to 30%, for example, if the cost per product is 1,000 yen, set a price of about 3,300 yen. Then, if the retailer purchased the product, they will sell it at a price that is 35% higher than the purchase price.

However, there are many cases where the numbers “30%” and “35%” do not have such a clear basis. It seems that there are many cases where this number is settled on this number while making adjustments to make profits, or it is an empirical rule from the past.

When I was in my twenties, I worked for a company that sold women’s clothing. Normally, we add about 35% to the purchase price, but if we think that “this product is likely to sell better if it is a little cheaper,” we will set it to 20%. So we decide the price.

The first thing I would like to say is that this kind of pricing method of “determining from the cost price” is not suitable for modern times.

It makes sense, but it’s just a “seller-oriented” idea

More precisely, it might be better to say that pricing, which is determined from the cost price, was the way of “mass consumption era”.

Production and distribution are shared, and the costs incurred in each process are accumulated. So to speak, the “price accumulation method” pricing is an extremely industrial society idea. Furthermore, behind this, there may have been the idea of ​​minimizing the accumulation in each process and lowering the final selling price as much as possible.

This is certainly reasonable, but it is a “manufacturer-oriented” and “seller-oriented” way of thinking.

It is said that Echigoya (now Mitsukoshi) was the first company in the world to set a fixed price for general consumers, but before that, the price should have been more flexible. There were times when the price would change depending on one’s mood, such as “He buys it every time, so that’s the price for that person,” or “I made a lot of money today, so this is the rest.” In the first place, the producers would not have been able to purchase raw materials at the same price every day, so I think the price was more fluid, including that.

Even now, when you go to an Arab souk (market), there are no price tags on the products, and customers and shopkeepers are said to have endless price negotiations. Negotiate over a cup of tea for 30 minutes or an hour. Some people may think it’s a waste of time, but I think this is also the origin of business.

Tags: useless satisfied collecting mere iron bars cost yen price product cost price PRESIDENT Online President Online

NEXT School bus operation management application Developed by a father of two children, provided free of charge In response to a girl’s abandoned death case “I can’t think of it as a person”: Tokyo Shimbun TOKYO Web