Effective price
The actual price or actual price suppressed the actual price to be paid per piece or per unit of usage of a product or service.
principle
Analogous to the concept of the effective interest rate for financial products, the quantification of an effective price should enable realistic cost mapping and comparability for products with complex price structures. Use cases exist, for example, when the actual price or the actual annual costs are made up of several price elements or when a direct comparison of prices is made more difficult by one-off fees, bonus services or discounts. The calculation is usually based on the minimum contract period. In the case of term contracts, the effective price can be expressed in the form of the effective annual costs.
application areas
The effective price comparison is used, for example, for:
- Electricity and gas contracts,
- DSL contracts,
- Cellular tariffs
- Magazine subscriptions.
definition
In marketing and in merchandise management, there is also a definition of the effective price that is made from the perspective of the provider: Here, the effective price is the price actually received by the provider for the sale of a product or service, after deduction of dealer or volume discounts, discounts and bonuses, shipping costs and promotional costs.
Use of the effective price concept
As a result of the liberalization of the telecommunications and energy markets, a variety of providers and tariff models has emerged that consumers can hardly understand. Such tariffs are often advertised on the basis of the costs specified by the providers for the first year. However, this “price tag” is often embellished with one-off bonuses or discounts that only apply to the first year. In addition, other cost-influencing regulations of the General Terms and Conditions are not taken into account in this price tag information. As a result, these price tags are not really suitable for comparing the costs of the various tariff products. The recording of all cost-relevant elements of a price regulation when forming an effective price, on the other hand, makes the actually expected costs visible and enables a comparison of very differently constructed contract models. The effective price comparison offers the consumer a quicker orientation in a market of complex products.
Calculation of the effective price
In contrast to the APR , there are currently no legal requirements for the method of calculating the effective price (requirements for the application and calculation of the APR can be found in the Price Indication Ordinance ). However, the following procedure has become established: All costs associated with an order are added up. In the case of a term contract, this applies to all costs that arise during the planned term.
Typical cost elements can be:
- Base price (example electricity and gas contracts: per year; example reinforcing steel: per kg),
- one-time registration, setup or provision fee (example: telecommunications contracts),
- Admission fee (for energy or other purchasing cooperatives),
- Processing or service fee per order,
- Acquisition costs for any equipment required when using the service (example: DSL modem),
- Additional purchase costs, in particular transport or shipping costs (for deliveries of goods),
- Surcharges (example reinforcing steel: for certain cross-sections),
- Network charges (for telecommunications and energy contracts),
- Taxes, duties and levies associated with the execution of the contract (example electricity contracts: electricity tax, levies under the Renewable Energy Sources Act, the Combined Heat and Power Act or the Ordinance on Charges for Access to Electricity Supply Networks, Concession Levy, VAT)
- Costs per delivery unit (for goods: per piece; for energy contracts: per kilowatt hour or per kilowatt hour package; for telecommunication contracts: per unit or per month), multiplied by the ordered or expected purchase quantities,
- Costs of additional consumption quantities (example energy contracts: the expected purchase quantities beyond the quantity of an electricity or gas package), using the usually increased additional consumption price,
- Interest costs for required advance payment services by the customer.
From these costs are deducted: any
- Discounts,
- Discounts,
- one-time new customer bonuses, provided they come into effect during the intended contract period, and
- the value of allowances (e.g. free kilowatt hours for energy contracts).
The effective total costs associated with an order calculated in this way are now divided by the delivery units associated with the order. This gives you the effective price per item (e.g. goods), per month (e.g. DSL connection), or per kilowatt hour (e.g. electricity and gas).
Examples
Electricity and gas price comparison
In 2011, the energy service provider HausPilot took the low informative value of pure “price tag comparisons” for electricity and gas contracts as an opportunity to use a “AGB factor” to record the cost effects of the general terms and conditions of electricity and gas contracts for the first time, and to use this to forecast the effective price to calculate these contracts. HausPilot's effective price comparison shows that the expected effective costs of an energy contract during a multi-year holding period will be all the closer to the price tag specified by the provider for the first contract year,
- the lower the one-time new customer bonus is,
- the longer-acting and the stronger the price guarantee statement is,
- the higher the chance of switching due to the shortness of the minimum contract term and notice period and
- the lower the prepayment or deposit payments to be made.
DSL price comparison
By calculating the actual price, the actual monthly costs of the DSL connection can be determined. The following are added for the intended contract period: the monthly basic fee, any fees for hardware rental or special options, one-off costs such as connection fees or shipping costs. Any starting credit or switch bonuses will be deducted from these total costs. The resulting amount is then divided by the months of the contract period, including free months.
Individual evidence
- ↑ Effective price comparison for electricity and gas at HausPilot
- ↑ Comparison of effective prices for DSL contracts at preis24.de
- ↑ Effective price comparison for DSL contracts at dsl-tarife.de
- ↑ Effective price comparison for DSL contracts at stargutschein.de
- ↑ Effective price comparison for mobile phone contracts at handypreisvergleich.de. In: www.handypreisvergleich.de. Retrieved December 1, 2016 .
- ↑ Effective price comparison for magazine subscriptions at abowelt.de ( Memento of the original from September 24, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Erich-Norbert Detroy, Christine Behle, Renate vom Hofe: Handbuch Vertriebsmanagement, 2007, ISBN 978-3-636-03082-5 , p. 575
- ^ Hans Pechtl: Preispolitik, 2005, ISBN 3-8282-0300-0 , p. 11
- ↑ Knut Hildebrand (Ed.): Business introduction to SAP® R / 3®, 2000, ISBN 3-486-25548-7 , p. 104
- ↑ emw magazine for energy, market, competition 4/2011, "With the effective price forecast for better consumer decisions"
- ↑ Calculation of the effective price for electricity and gas
- ↑ a b Calculation of the effective price for DSL contracts ( Memento of the original from September 9, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Calculation of the effective price for mobile phone contracts. In: www.handypreisvergleich.de. Retrieved December 1, 2016 .
- ↑ Description of the effective price calculation for electricity and gas
- ↑ YouTube clip: The effective price of electricity and gas
