The Calculation Of Price: Involving Cost Analysis And Break - Even Method Of Dobilas Bio

Introduction. Practical part. Description of the analyzed company. A brief description of the product. A brief description of the market in which the company operate. Analysis of the factors that influence price decisions. External or macro environment factors factors located outside of the company which may influence pricing decision of the company. Internal or micro environment factors these factors are more directly related with the company to identify the specific causes or factors which may influence the company’s decisions in process of setting the price of its products. The principles of pricing of analyzed company’s products. The calculation of BtoB price under EXW conditions of the product. The calculation of selling price for a customer or end-user of the product. Finding a break-even point using a break-even method. Company’s pricing strategy for discounts and pricing features. Conclusion. References. Figure Regional divion in percentage of sales made in each region (sourceAIPTFigure Bio curd cheese with vanilla product picture (source biosala. LtFigure Lithuanian market share in 2016 of the main milk producers (sourceAIPTFigure Costs and revenues of the product and break even point (made by authorTable Comparation of prices of curd cheese among the main dairy producers (source barbora.

This paper, therefore, has the goal of analyzing the pricing strategy of one specific company to understand the process of setting a price over products by calculating the selling price, break even point and setting the pricing goals of the company.

Moreover, it’s important to highlight that there are many similar products in the market, however, this specific product has been differentiated by implementing new feature of the usual curd cheese and therefore, responding to the new tendency for ecological products.

Moreover, the object is the Dobilas bio curd cheese snack of Zemaitijos pienas by calculating its price and break even point. The paper’s aim is to calculate the price of this specific curd cheese snack by using specific methods for the analysis.

The tasks below have been set to achieve the goal of the paper:

To describe the company, its activity, the specific product and its goals of pricing.

To identify the company’s principles of pricing of the product analyzed by calculating its price for BtoB and BtoC.

Application of break even method to find out the break even point of the analyzed product.

To describe the company’s pricing strategy of the analyzed product.

The research methods rely on literature review and comparison, price calculation of the product under EXW conditions, break even point analysis and finally analysis of the results obtained of the company’s principles of pricing over Dobilas bio curd cheese snack.

Following the overview of pricing theoretical part with its main methods and strategies of the previous part, this section introduces a specific product into the analysis to put into the practice all previous.

Firstly, it starts with a briefly description of the company, its history, legal form and its range of manufactured products. Then, it goes deeper into the analysis of the specific product selected with all the products features and use.

The third part is more related with the company’s market or industry which is operated with the description of its main competitors, market share and market type. Following the above, the identification and description of the company’s factors and goals in pricing based on the product, market, promotion type, etc.

Fifthly, it introduces the principles of pricing of Dobilas bio curd cheese which will be calculated using business to business method under EXW condition and business to customer price. Moreover, the next step consists in the calculation of the break even point under the break even analysis in order to find out the price at which the company cover its costs and finally, the identification of company’s strategy for discounts and pricing features.

Žemaitijos pienas is one of the biggest milk production and processing company in Lithuania with more than 1200 employees and quite known for producing high quality products, such as, “Magija”,” Džiugas “, “PIK NIK “, “Dobilas “, etc. (Nasdaq Baltic 2018)

In 2017, the company’s turnover was 172,28 million of euros and the profit obtained was 5 million of euros. In comparison with the previous year, the company have obtained 15 percent bigger turnover due to increase the price of butter and sour cream, although company’s profit was 3 percent lower due to the same factors (Globe news wire 2018)