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COMPANY PROFILE: VIGNESH AND COMPANY

Vignesh & Co is an organization with its vast approach towards empowering with new technology since 1990. We are engaged in selling Currency Counting Machine, Forged Notes Detector, CCTV camera and Paper Shredder. We understand the risks involved in every walk of life as in shops, banks, exchange centers, etc who have placed their trust on these electronic machines to save them from loss or fraudulent practices. The efficiency of these machines is remarkable and worth the buy with technology becoming more popular and purposeful. Further, our fake note counter display tool plays a vital role in fraud detection in complex areas. Our ranges of products also include CCTV cameras to the product list which debates on the video security system. On the whole, CCTV Surveillance Camera, Security Camera, Speed dome Camera, Day Night camera, is some of our core specialty products. The security of the individuals namely personnel, company or organization these cameras provide security and unwanted intrusion into the premises. Paper shredder is simply a perfect device to manage waste, properly destroying marketing plans, health records, other confidential information falling into wrong hands. ASTRA shredder is being marketed here along with its enhanced CD shredder in it. With our research from ten years we want to ensure the clients that our company is build upon trust and protect individuals from risks and provide safe environment. Our distributors can validate our services and offers based on their satisfaction. We will offer these services based on their requirements and preferences.

Vignesh & Co, Electrical and Electronics, are a manufacturer of modern scientific equipments. Our brand name Astra has a range of products is simply remarkable making note counting and fake note detection easy. Our ten years of research and development has paved for manufacturing such machines which can be received by the end-users. We are seeking distributors nationwide for Astra Currency Counting Machine and Astra Fake Note Detectors and CCTV Surveillance Camera system and other types of security system cameras. Our ASTRA paper shredder is simply promising in managing unwanted thrash in the organization. These shredders also help to safeguard complex business information or designs falling into wrong hands. Power efficiency is possible due to electronic control of the shredder We target distributor's domestic customers in India. We want to prove that our business with the state of the art technology can cater to your needs and provide longtime relationship to our prospective client. Our products are designed to deliver maximum efficiency. The user's requirement is the main platform we consider thus guarantee a lower price strategy. Our services include offering of AMC (Annual Maintenance Contract) after a warranty period of one year. We deliver spares of (OEM) for our units. Our working schedule is reduced to 24/6. Vignesh & Co, Electrical and Electronic is manufacturer of modern Scientific equipments. Our machines, Astra Currency Counting are innovated for individuals. And Bundle counting simultaneously fake currency detecting too. Our Ten years research and development brought these machines to the market, which are very well received by the end-users. We offer AMC (Annual Maintenance Contract) after one year warranty period. And spares of (OEM) our units.

We are looking for hard working distributors Nationwide for Astra Currency Counting Machine and Astra Fake Note Detectors. Nature of Business Turnover Company name Mobile / Cell Phone Telephone Manufacturer Rs. 50 Lakh - 1 Crore ( or US$ 100 K - 200 K Approx.) Vignesh & Company +(91)-9842249023 +(91)-(422)-2522235 5372721 Fax No Address Web page : : +(91)-(422)-5373721 +(91)-(422)-5372721 No. 539- A, No. 100 Feet Road, Gandhipuram, Coimbatore - 641 012, Tamil Nadu, India www.vigneshandco.com

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OUR VISION
To provide accuracy and security to the end-users against all frauds and insecurities with strong roots.

OBJECTIVES
1. Quality - The quality of the currency handling equipment is reliable and the employees with the state of the art equipment to deliver customer satisfaction. 2. Durability or Life Span of equipments - The durability of the equipment with through excellence to improve the quality is what we are more focused upon. With our Research& Development team we look for innovation and betterment of equipment. 3. Low consumption of energy - The energy consumption of these equipments is low when compared to other machines to make it more reliable and cost effectively.

4. Guarantee of Products - The AMC (Annual Maintenance Contract) contract after the period of one year of warranty and the availability of spares for our units. 5. Any time service - We offer any time services to our customers to make lasting impression on them. Staff Augmentation: We have around ten employees who are greatly skillful in higher technology. Their skill set has paved the way for the manufacturing of the machines.

PRODUCT PROFILES
Cash Counting Machine handles loads of cash be it old, new or soiled in same manner. The accuracy is simply remarkable. This currency counter is just not reduced to the large businesses even small and businesses due to its cost-effective feature. As technology improves, it must be used usable and purposeful. Astra Loose Note Counting Machine: AXLNC Astra Loose Note Counting Machine : AXLNC MG-1 Astra Loose Note Counting Machine :AXLNC MG-2 Astra Bundle Note Counting Machine: AXBNC Desktop Astra Bundle Note Counting Machine: AXBNC Floor Astra Currency Bundling Machine Astra Currency Detector Machine - UVL 200 (W) Astra Paper Shredder CCTV Cameras

The above mentioned Currency counting Machines having their scope in various sectors like Bank & Financial Institution Hospitals School & Colleges Hostels & Restaurants Shopping malls Indian Railways Airport Authority Other transport services Retail Outlets & showroom And all other Business Firms

ASTRA LOOSE NOTE CURRENCY COUNTER: - AXLNC

FEATURES: * Micro Computerized for Counting * Auto Dust Absorption * Fully Automatic * Built-in detection system for fake note detection * Adding and Batching facility.

SPECIFICATION: Counting Speed : Bank Note Size : Weight : Power Source : Power Consumption : Dimensions : 900 pcs/min Upto 190 x 85 mm (1000 Rupee Note) 8 Kg AC 220V 10%, 50Hz 80 Watt 310 x 260 x 210 mm

ASTRA LOOSE NOTE CURRENCY COUNTER: - AXLNC MG-1

SPECIFICATION: Counting Speed : Bank Note Size : Power Supply : Dimensions : Power Consumption : Net Weight : 1000 pcs/min Upto 190 x 90 mm AC 220V 10%, 50Hz 315 x 265 x 290 mm 75 Watts 7 Kg

* Counterfeit Detecting Function (UV or UV & MG) * Auto & Manual Start Counting Mode * Addition Function, Batch Function

* Chained Note Detection (Two Sheets) * Size Detection * IR (Paper Thickness Notes Stuck together) Detection * Half-Note Detection, Dual Digital Display, Customer Display

ASTRA LOOSE NOTE CURRENCY COUNTER: - AXLNC MG-2

Specification: * Counterfeit Detecting Function (UV or UV & MG) * Auto & Manual Start Counting Mode * Addition Function, Batch Function * Chained Note Detection (Two Sheets) * Size Detection * IR (Paper Thickness Notes Stuck together) Detection * Half-Note Detection, Dual Digital Display, Customer Display

Counting Speed : Bank Note Size : Power Supply : Dimensions : Power Consumption : Net Weight :

1000 pcs/min Upto 190 x 90 mm AC 220V 10%, 50Hz 315 x 265 x 290 mm 75 Watts 7 Kg

ASTRA BUNDLE NOTE CURRENCY COUNTER: - AXBNC Desktop Model

Features: * Auto start * Vacuum Suction * Preset Counting * Bundle Counting * Batching * Addition * 100% Accuracy High speed Countingor * Micro Control Suction New & Old Currency, etc.

Counting Speed : Feed System : Counting Speed : Hopper Capacity : Power Source : Power Consumption : Dimensions :

1000 pcs/min Vacuum 100 pcs/4 sec 200 Notes AC 220V 10%, 50Hz 330 Watt 300 x 400 x 255

ASTRA BUNDLE NOTE CURRENCY COUNTER: AXBNC Floor Model

Feed System : Counting Speed : Hopper Capacity : Power Source : Power Consumption : Dimensions : SPECIFICATION

vacuum 100 pcs/4 sec 200 Notes AC 220V 10%, 50Hz 330 Watts 295 x 325 x 720

* Elegant, compact & portable, easy to move * High Speed Operation

* Special Note Dust Collecting Filters * Auto/Manual Start, Check mode, Free Mode * Preset Batch, ADD Mode, OK Stamp Mode * External display for Customer

ASTRA BUNDLE NOTE COUNTING MACHINE- DESKTOP MODEL: - AXBNC


Cash Counting Machine handles loads of cash be it old, new or soiled in same manner. The accuracy is simply remarkable.

FEATURES: * Simple operation * Checks Batch-free Stamp-Add * Permanent Memory storage of accumulated Number * Low Power Consumption * Counting Speed of 100 notes in 4 seconds * Digital Display either 4-Digit or 3-Digit Batch Display

ASTRA FORGED NOTES DETECTOR: UVL 200


Every organization or business is at risk when counterfeited notes are received. Our forged note detector allows in identifying forged notes at the time of cash transactions. This way it is easy to minimize financial losses and embarrassment of our clients or ourselves at time of decision making. Our forged note detector allows in identifying forged notes at the time of cash transactions. This way it is easy to minimize financial losses and embarrassment of our clients or ourselves at time of decision making.

SALIENT FEATURES: * Modernized Scientific Equipment to detect: a. Forged Currency (Both Indian and Foreign) b. Passport& Visa c. Demand Drafts d. Travelers' Cheques e. Credit Cards f. Major Company's Share Certificates. * Useful for institutions handling cash since it reduces the risk to the staff concerned. * The equipment is designed to detect 100 pieces or 1000 pieces at one strike and in a few seconds. * A powerful lens is provided on the top of the machine to magnify the notes features of the currency and other materials.

THE INTELLIGENT LOOSE NOTE COUNTING MACHINE LNCM (UV)


An ISO 9001:2008 certified passed product. The Intelligent Loose note counting machine Model Textron LNCM (UV) is very user friendly and economic loose notes counter for worldwide banknotes and all types of currencies. This Loose note counting machine is the best available machines for small & medium shops, markets, hospitals, colleges, real estate builders and companies for counting less amount of cash and any type currencies in just 4 seconds of 100 number notes. The best in terms of prices and user friendly with excellent feature of UV detection and other features as presented below.

KEY FEATURES

Accepts bank notes of Rs.5, 10, 20, 50,100,500 and1000 and other worldwide currencies as USD, GBP, Euro, etc. Intelligent design to operate with ease and very user friendly. Function of fake note detection by UV inspection for checking Paper quality of zeros currencies. Incomplete bank note will be detected, and audible alarm sounded Outer customer display for user Inbuilt machines dust collector and small desktop type

SPECIFICATIONS Size of bank note Counting Speed Digital Display Power Supply Operating Power Consumption Dimension Weight 50x110mm, 90x185mm 15-20 notes per Sec. 4/3 digit 220 V 50 Hz 75 Watts (275X260X225)mm 10 kgs. Approx.

ASTRA PAPER SHREDDER

Paper shredder is simply a perfect device to manage waste, properly destroying marketing plans, health records, other confidential information falling into wrong hands. ASTRA shredder is being marketed here along with CD shredder in it.

SALIENT FEATURES: * Protect identity or safeguard secrets. * Power efficiency * Risk management * Power Saving

CCTV Camera:
Nowadays everything is at risk either to the place or the person. The client understands that security to the premise and personnel is important for smooth running of the organization. These surveillance cameras help in crime prevention thus protecting the environment for the people around.

The various cameras available with us are: * CCTV cameras * Auto Dust Absorption * Switcher * Digital Video recorder * CCTV Lens * UTP Transceiver Accessories * Cable Security System, etc.

OUR VALUABLE CLIENTS


Canara bank Laksmi vilas bank The Indian overseas bank Indian bank State bank of India Sundaram finance group ABT travels Bajaj finance Aravind eye care system

ORGANISATIONAL CHART

VARIOUS DEPARTMENTS
The Following are the various departments in our (Vignesh and company) Company. Sales Department Production Technology Department Production Control Department General Administration Department Development Department Manufacturing Department Quality Assurance Department Cost control Department

PRODUCTION TECHNOLOGY DEPARTMENT


The members of our Production Technology Department are skilled in their work, manufacturing high precision dies in addition to placing orders to external suppliers for special dies, as well as managing the inventory for the tens of thousands of dies that arrive at the warehouse. Furthermore, this department designs and puts together highly efficient processing machines and carries out maintenance to ensure that the machines are always working properly.

PRODUCTION CONTROL DEPARTMENT


The Production Control Department manages the status of accepted orders and shipments, and supports the manufacturing department to achieve even better efficiency. In addition, this department monitors the cost of manufacture and assists with cost cutting measures.

There are five production sub-functions

Production and planning.

They will set the standards and targets at each stage of the production process. The quantity and quality of products coming off a production line will be closely monitored.

Purchasing department

This department will provide the materials, components and equipment required. An essential part of this responsibility is to ensure that stocks arrive on time and are of good quality

The stores department

The stores department are responsible for stocking all the necessary tools, , raw materials and equipment required to service the manufacturing process.

The design and technical support department

They are responsible for the design and testing of new product processes and product types, together with the development of prototypes through to the final product.

The works department

This department is concerned with the manufacture of products. This will include the maintenance of the production line and other necessary repairs. The works department may also have responsibility for quality control and inspection. AIMS AND FUNCTIONS OF PRODUCTION CONTROL DEPARTMENT Production is the functional area responsible for turning inputs into finished outputs through a series of production processes. The Production Manager is responsible for making sure that raw materials are provided and made into finished goods effectively. He or she must make sure that work is carried out smoothly, and must supervise procedures for making work more efficient and more enjoyable.

In our company the production function may be split into five sub-functions: 1. The production and planning department will set standards and targets for each section of the production process. The quantity and quality of products coming off a production line will be closely monitored. In businesses focusing on lean production, quality will be monitored by all employees at every stage of production, rather than at the end as is the case for businesses using a quality control approach. 2. The purchasing department will be responsible for providing the materials, components and equipment required to keep the production process running smoothly. A vital aspect of this role is ensuring stocks arrive on time and to the right quality. 3. The stores department will be responsible for stocking all the necessary tools, spares, raw materials and equipment required to service the manufacturing process. Where sourcing is unreliable, buffer stocks will need to be kept and the use of computerized stock control systems helps keep stocks at a minimal but necessary level for production to continue unhindered. 4. The design and technical support department will be responsible for researching new products or modifications to existing ones, estimating costs for producing in different quantities and by using different methods. It will also be responsible for the design and testing of new product processes and product types, together with the development of prototypes through to the final product. The technical support department may also be responsible for work study and suggestions as to how working practices can be improved. 5. The works department will be concerned with the manufacture of products. This will include the maintenance of the production line and other necessary repairs.

The works department may also have responsibility for quality control and inspection. A key aspect of modern production is ensuring quality. The term quality means fitness for purpose i.e. a product, process or service should do exactly what is expected of it.

MANUFACTURING DEPARTMENT
Each Manufacturing Section, from 1-5, performs production activities that build a high degree of quality into every part by utilizing the productivity of each professional throughout the production process. Additionally, each Section strives to reach mass production quickly by cooperating with related departments such as the Development and Production Technology Department and the Subcontracted Management Control Section which oversees the management of orders to our partner factories. Vignesh and company of Manufacturing is based on a range of specialized techniques and inter-departmental cooperation the technology to manufacture processing machinery and dies, to create a manufacturing line, and to manage product quality, and the cooperation that organizes these into one. We achieve the perfect balance between high quality products and high efficiency.

MANUFACTURING LINE: A system of manufacturing where high quality products are produced with maximum efficiency in order to achieve this, the creation of a perfect manufacturing line with perfect methods and perfect machinery and equipment is indispensable. At vignesh and companies Currency machine Manufacturing, we have created a manufacturing line that has both sophisticated processing capability and a minimal number of manufacturing steps, with a flexible layout that can be altered according to the ever-changing state of our orders, while at the same time thoroughly analyzing the production capacity of the processing machines and the number, materials and shapes of products for processing. Furthermore, we are always trying to improve our productivity and quality, through measures such as reducing the time spent on each process, and making sure our engineers are always striving to be better at what they do.

QUALITY ASSURANCE DEPARTMENT


The Quality Assurance Department maintains and improves the quality of products manufactured within the company and at partner companies so that no defects or flaws occur in the processing stage, and also carries out the final product inspection for the same purpose. This department also deals with enquiries (including any complaints) from customers.

DEVELOPMENT DEPARTMENT
The Development Department designs the manufacturing process and dies, and is involved in prototype production and commercial production for the development of new products and the improvement of existing products.

This department makes improvements where necessary and builds the manufacturing line to a high standard so that even higher quality products are produced in a more efficient way.

GENERAL ADMINISTRATION DEPARTMENT


The role of the General Administration Department is wide-ranging and includes accounting, labor, personnel, health and safety, purchasing, operating and managing computer systems, managing the International Quality Standard ISO9001, the International Environmental Standard ISO14001 and the automotive industry-specific quality management system standard ISO/TS16949.

FINANCE DEPARTMENT

Book keeping procedures keeping records of the purchases and sales made by a business as well as capital spending.

Preparing Final Accounts Profit and loss account and Balance Sheets Providing management information Managers require ongoing financial information to enable them to make better decisions.

Management of wages The wages section of the finance department will be responsible for calculating the wages and salaries of employees and organizing the collection of income tax and national insurance for the Inland Revenue.

Raising Finance The finance department will also be responsible for the technical details of how a business raises finance e.g. through loans, and the repayment of interest on that finance. In addition it will supervise the payment of dividends to shareholders.

COST CONTROL DEPARTMENT


By the close monitoring of the projects' budget and expenditures, our Cost Control System gives a fair indication of the existence and the extent of any forecasted problems so it is monitoring and controlling the problems during project's life cycle on time before it is too late. The System's tools are: forecasting, cost reporting, tracking & controlling, it is where we record the budget cost of a project and compare it with the actual cost (including any approved budget changes-variation), this empowers our control points on Material Requisitions & Sub-Contractors Payments Certificates. All Client's payments are controlled, monitored and updated for all the projects through the close monitoring to the submission date, approval date and due date of each payment as per the contractual terms. Our Flash Reports concentrate on spreading the cost control culture among all the staff who are involved in initiating, planning, executing and monitoring any running activities in our company, introducing a guideline for the staff of the best possible practices, opening a healthy conversational channel between junior and senior staff about any critical pointed subjects, cutting the extra costs and rectify any incorrect procedure. Our Reporting System is a very powerful tool to the Top Management where they review the projects' progressive financial status which forms a fundamental base to our overall strategic organization planning.

MARKETING DEPARTMENT
Our Sales Engineers have the product knowledge and technical knowledge to be able to discuss and plan matters such as specifications, cost and completion times in detail with our customers. In order to provide products that meet the needs of our customers, our sales engineers effectively manage everything from the initial planning stage to shipment and completion.

These are the main section of the market departments:

Sales department is responsible for the sales and distribution of the products to the different regions. Research & Department is responsible for market research and testing new products to make sure that they are suitable to be sold. Promotion department decides on the type of promotion method for the products, arranges advertisements and the advertising media used. Distribution department transports the products to the market.

SALES ACHEIVEMENTS

HUMAN RESOURCE DEPARTMENTS


An efficiently run human resources department can provide your organization with structure and the ability to meet business needs through managing your company's most valuable resources -- its employees. There are several HR disciplines, or areas, but HR practitioners in each discipline may perform more than one of the more than six essential functions. In small businesses without a dedicated HR department, it's possible to achieve the same level of efficiency and workforce management through outsourcing HR functions or joining a professional employer organization. Recruitment The success of recruiters and employment specialists generally is measured by the number of positions they fill and the time it takes to fill those positions. Recruiters who work in-house -- as opposed to companies that provide recruiting and staffing services -- play a key role in developing the employer's workforce. They advertise job postings, source candidates, screen applicants, conduct preliminary interviews and coordinate hiring efforts with managers responsible for making the final selection of candidates. Safety Workplace safety is an important factor. Under the Occupational Safety and Health Act of 1970, employers have an obligation to provide a safe working environment for employees. One of the main functions of HR is to support workplace safety training and maintain federally mandated logs for workplace injury and fatality reporting. In addition, HR safety and risk specialists often work closely with HR benefits specialists to manage the company's workers compensation issues.

Employee Relations In a unionized work environment, the employee and labor relations functions of HR may be combined and handled by one specialist or be entirely separate functions managed by two HR specialists with specific expertise in each area. Employee relations are the HR discipline concerned with strengthening the employer-employee relationship through measuring job satisfaction, employee engagement and resolving workplace conflict. Labor relations functions may include developing management response to union organizing campaigns, negotiating collective bargaining agreements and rendering interpretations of labor union contract issues. Compensation and Benefits Like employee and labor relations, the compensation and benefits functions of HR often can be handled by one HR specialist with dual expertise. On the compensation side, the HR functions include setting compensation structures and evaluating competitive pay practices. A comp and benefits specialist also may negotiate group health coverage rates with insurers and coordinate activities with the retirement savings fund administrator. Payroll can be a component of the compensation and benefits section of HR; however, in many cases, employers outsource such administrative functions as payroll. Compliance Compliance with labor and employment laws is a critical HR function. Noncompliance can result in workplace complaints based on unfair employment practices, unsafe working conditions and general dissatisfaction with working conditions that can affect productivity and ultimately, profitability.

HR staff must be aware of federal and state employment laws such as Title VII of the Civil Rights Act, the Fair Labor Standards Act, the National Labor Relations Act and many other rules and regulations.

TRAINING AND DEVELOPMENT


Employers must provide employees with the tools necessary for their success which, in many cases, means giving new employees extensive orientation training to help them transition into a new organizational culture. Many HR departments also provide leadership training and professional development. Leadership training may be required of newly hired and promoted supervisors and managers on topics such as performance management and how to handle employee relations matters at the department level. Professional development opportunities are for employees looking for promotional opportunities or employees who want to achieve personal goals such as finishing a college degree. Programs such as tuition assistance and tuition reimbursement programs often are within the purview of the HR training and development area.

INTERACTION OF DEPARTMENTS

PRODUCT DEVELOPMENT:
The product (gears in this case) is developed by these three departments. The researchers gather information on new and improved materials that can be machined. Then, the new gear system is developed using complex engineers software such as AutoCAD. The Buttons/Gears are tested on the computer system to see if they work. The designers take the findings from the research and development stage and fit the new gear system to a variety of vehicles. All three departments work very closely together and meet at least on a weekly basis. Sometimes they work in teams made up of researchers, development managers and designers.

PRODUCTION: Once a prototype gear system has been produced it is tested rigorously and the design specification is passed on to the production line. The Manufacturing Manager takes over and plans mass production. He/she works closely with a number of junior managers who plan each stage of manufacture, to the smallest detail (Section Managers). It is essential that the managers of each section of production meet regularly to solve problems and suggest improvements to the manufacturing operation.

The Manufacturing Manager has the ultimate responsibility and he/she meets section managers twice a day for updates. Quality control is checked at all stages and any faults/errors can usually be traced back to the various sections of the production line. The Manufacturing Manager will suggest improvements in design and production, through meetings with research and development managers.

MARKETING:
Customers requirements are listened to at all times. Products are only developed if market research shows there is a need for them. After a new product has been developed and manufactured market researchers follow the product through its life cycle continually asking for customer information. In this way information can be fed back to Research and Development & Production Line Managers. Therefore, the product can be improved.

The Most competitors of our Concern as follows Maxsells Web Sec Systems G.B. Tech,India Ktron Systems RDS Groups K.T. Automation Cannon Electronic System Prompt Automation

PRICING POLICIES OF OUR CONCERN


The policy by which a company determines the wholesale and retail prices for its products or services. Determining prices and overall pricing strategies is one of the toughest challenges most businesses face. Should you be the low-price provider? Should you charge premium prices for premium products or services? What happens if competition enters or leaves your marketplace? Many business owners default to a common position: They determine what the competition charges and then try to either meet or beat those prices. Over the short term that approach can be successful, but since many customers make purchase decisions based on considerations other than price, low-cost providers sometimes struggle to attract customers who make decisions based on a comparison of price and value.

To develop a pricing strategy, the first step is to gather data:


Competitor prices and pricing strategies Customer perception of products and services Customer benefits of products and services Cost of producing, procuring, or generating products and services (variable costs) Fixed business costs (overhead)

The goal is to understand your business model and operating costs as well as the current pricing strategies and price points in the marketplace.

BASIC PRICING METHODS Once you have data in hand, apply one or more pricing methods to the specific business and market:

Cost-Plus: Production costs are determined and then a target profit margin is applied. For example, if a product costs $10 to manufacture, and the business wants to make a 20% profit, the price is $12 per unit.

Targeted Return: Investment costs are determined, and a targeted rate of return is applied to deliver the required return on investment. For example, if investment costs are estimated to be $5 per unit, and investors seek a 10% return on investment, the price is $5.50 per unit.

Value: The value customers receive is calculated and pricing is applied accordingly. For example, if a personal session with a business advisor provides the same value as a two-day seminar, the personal session could be priced at the same level (or higher if individual attention and mentoring provides an even greater value than group-based training).

Psychology: Psychological or emotional impact is used to determine final pricing. For example, customers may respond more positively to a product with a price of $199.00 than to the same product priced at $200.00.

PRICE STRATEGY OBJECTIVES


Business strategies can also affect price. Keep in mind each strategy can have multiple effects; some positive, some negative. The company may use pricing strategies seeking to:

Maximize Current Profits: Higher prices, at least in the short term, can help improve overall profit margins. Of course, over time high prices may result in significantly fewer transactions and lower revenues.

Maximize Cash Flow: Lower prices can increase transactions and increase overall revenue and boost cash flow but possibly at the expense of profitability. Maximize Profit Margins: Higher prices yield higher profit margins, but could affect the quantity of sales. Maximize Sales Quantity: Lower prices - or product bundles can increase the total number of items sold and generate discounts or rebates from suppliers or wholesalers.

Pricing strategies should also be tied to company objectives. The following are common business goals and the effect on pricing:

Serve Different Market Segments: "One size fits all" prices can turn away customers at both ends of the demographic scale. For example, if a company sells a maintenance service, a standard monthly fee of $95 may be too high for small customers and too low for customers who want additional services and faster response times. Fixed prices may not be appropriate for any customer; if that is the case, building price tiers could make sense.

Serve Different Market Verticals: A company that sells individual products to retail customers may decide to sell products to government agencies interested in bulk purchases. Different pricing strategies are necessary to take into account volume sales, delivery costs, and other factors unique to servicing government clients.

Generate New Customers: Flat fee pricing often generates additional customers, especially if a flat fee is perceived as cheaper than a la carte purchases. Subscription and time-based purchase agreements are common ways of generating new customers. Typically a company will create pricing strategies to generate new customers at a low profit margin, and then seek to provide additional services for additional fees.

Create Additional Sales Opportunities: Existing customers especially satisfied existing customers are fertile ground for additional purchases. Tiered pricing systems for services, and ancillary or complementary products for existing products are great ways to generate additional revenue per existing customer.

Minimize Credit Sales: Retail sales are based on cash (or credit card) payments on an up-front basis. Service businesses typically bill after at least a portion of those services have been provided, which requires the company to in effect extend credit. Some businesses develop service plans that include up-front deposits or that require up-front payments. For example, most cable companies charge for services ahead of service delivery; the bill delivered on September 15, for instance, may cover the time period running from Oct. 1 to October 31.

Minimize Barriers to Purchase: Time-based pricing can make an initial purchase more attractive. Variable pricing is most often used for products purchased from television direct marketers: " Three easy payments of $29.95 each!" Variable pricing can make an initial purchase more attractive as well: a company could offer a service for a reduced rate for the first three months, with subsequent months charged at a higher rate. The goal in that case is to give a customer incentive to try a service because the price is low, at least in the short term.

Keep in mind the best pricing strategies are flexible and allow a company to respond to changes in supply or demand, new competition, changes in technology, etc. Price strategies should constantly be evaluated and tested to ensure the company maximizes return on sales while meeting a variety of other goals and needs. Many companies have a significant opportunity to improve their top- and bottomline growth by improving their processes and execution on pricing. As these authors point out, senior management teams must summon the analytical skills and courage to confront their reluctance about changing prices and align their pricing more closely with the value of their products or services.

The Company follows the following pricing policies Competitive parity pricing: Here, prices are set in line with those prevailing in the market especially those price levels set by the industry leader. This policy is best used by new companies entering an industry in which there are well established competitors or market leaders. The new company may have no choice but follow the price set by established leaders. If it falls to follow the leader (for instance, if it sets a price that is too low) the leader may initiate a price war by setting a ridiculously low price that will rock the boat of the business of the new entrant. The flaw in this approach is clear. It does not consider changes in the firms own costs and demand. If production and distribution costs increase, these will not be reflected in the price charged as long as the policy is to charge the price that competing firms are charging. On the other hand, if competitors increase their prices, a competition-oriented pricer will increase his price even if the production and distribution costs remain the same or have fallen. LOSS-LEADER PRICING OR PROMOTIONAL PRICING: Here, a popular product is deliberately priced low in order to attract a large number of buyers who are expected to buy the less popular products of the firm. The very popular and the less popular products are sold together. The aim is to sell the entire product-line rather than to make a big profit on the popular product itself. Pricing policies and practices should be dynamic, flexible, kept under review and adjusted from time to time in order to reflect and accommodate changes in costs, demand, competition, discounts, the stage in the products life cycle and the objectives and internal resources of the company.