Principles of Marketing
Price can be defined as a measure of value exchanged by the buyer for the value offered by the seller. It is the worth of the product. Pricing is influenced by both internal factors (marketing objectives, marketing mix strategy, cost of production) and external factors (The demand, supply, type of market, consumers perception, competition, government regulations)
It’s when you set the price of products lower than that of competitors
When you set product price higher than competitors
You set price of your product in line with competitors
Cost plus pricing
When a marketer adds a mark-up (percentage of profit) on the initial cost of producing a product
You sell the same product at different prices based on the target market, geographical location or timing
When you set a price in consideration of consumers emotions not their economics. For example you sell a product at 199, 149
You set the price of a product low for some time (short period) of time then you increase it. This strategy is employed to increase the product life cycle.
Loss leader pricing
You sell your product at a loss knowing that as consumers buy the product being sold at a loss, they are likely to buy other products offered by the organization.
Value based pricing
Setting a price based on consumers perception and not the sellers expectations
Demand oriented pricing
Pricing based on the demand prevailing in the market.