administered pricing

1. WELCOME

2. K V A F S U
K V A F S U
Dairy science college
MBA

3. TOPIC : ADMINISTERED PRICING
Submitted by
VASUDEVAREDDY. M.S.

4. Contents
Reference
conclusion
Ways
Definition
Introduction

5. Introduction
• In many countries the price of food and some agricultural products are government
controlled. Prices may be administered throughout the marketing chain or at a particular
levels or points. Some pricing systems are combination of market determined and
administered pricing

6. Definition
• The price of a good or service as dictated by a governmental or governing agency.
(administered prices are not determined by regular market forces of supply and demand.)
• Administered prices as;
“Those which are imposed on the market by some external body”,
- Westlake.

7. Different ways of pricing system can be administered
• First…..
• Second…..
• Third…..

8. First.....
Prices may be administered at one or more points in the pricing system and determined by market
forces at others.
This system can lead to problems.

9. Second.....
• A second approach is to allow a proportion of the total supply of a commodity to be traded under
a formal administered price structure while the reminder is traded informally .
• This occurs in case of staple food crops in many developing countries.

10. Third.....
• A third hybrid system is where a commodity is sold at market prices, but revenues are pooled
before being disbursed to farmers.
• This system results in all farmers in the scheme receiving the same price.
• This system is termed ‘revenue pooling’ and differs from other forms of administered pricing to the
extent that, once the system is established, the government can only influence the price indirectly
through,
• for example

11. For example
• The imposition of taxes and levies . Revenue pooling often results in the farmer receiving
different prices from those at which his particular deliveries sell, the pooling removes the
impact of short-term price instability.
• Lastly government interventions may be selectively applied to one sector of agriculture or
another.
• For example, there may be intervention in the prices paid to small holders, but not to
plantations or large estates, or vice versa.

12. Summary
• The task of pricing takes place a with in dynamic environment and so an organization
must continually review its prices and the procedure employed in arriving at these prices.
• When making pricing decisions, marketers have to take in to account a range of factors.
Internal factors include company marketing objectives, the marketing mix strategy and
cost structure. External factors include, the state of marketing developed, and the
pattern of supply and demand, the nature level of competition environmental
considerations such as legal, political and economic events and social norms and
trends.

13. Conclusion
• The supply and demand of any product will depends on the pricing decisions.

14. Reference
• Investopedia.htm
• Encyclopaedia Britannica.htm
• Notes

15. Thank you
Reddy…..