EDUCATION 101: Pricing Decisions

Principles of Marketing

New Product

 

PRICING DECISIONS

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 a product.

FACTORS INFLUENCING PRICING DECISIONS

The factors influencing pricing decisions can be classified to as either Internal or external factors. Thus:

  1. Internal
  2. External

INTERNAL FACTORS

Marketing Objectives

Includes objectives such as survival (you set the price low), Profit maximization (You set the price high) Quality leadership (You set the price high) Market share leadership (where you set the price low)

Marketing mix strategy

The other P,s that is Place , promotion, Product, Probe and or (Price) will influence the final price of a product. For instance the quality of a product, the method of promotion used and place where the product is sold will influence price of product.

Cost of production

Marketers will always ensure that the price charged for a product covers the cost of production.

 

EXTERNAL FACTORS

The Demand

If the demand of a product is high, the price is high.

The Supply

If the supply of a product is high the price is low

Type of Market

The target market will influence the price charged for a product.

Consumers’ perception

Marketers will always charge a price that is in line with consumers perception of products price.

Competition

In circumstances of high competition, the price is low.

Government Regulation

The government will always influence price of products through taxation.

Economic situation

If there’s inflation the prices of products are likely to be relatively higher.

 

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