|
Price is an important element of the marketing mix. The most important
factors that determine the price of a product include: the objectives of the
organization, the cost of production, the stage in the product life cycle,
government regulations in pricing, the nature of the competition, and of
consumers in the market, and so on. Pricing objectives are based on overall
organizational objectives. The objectives in general fall under: cost
oriented, profit oriented, volume oriented and competition oriented
objectives. The pricing strategies organizations use fall under three broad
groups – differential pricing strategies, competitive pricing strategies and
product line pricing strategies. Cost oriented pricing and market oriented
pricing are two of the most commonly used pricing methods. In cost oriented
pricing, the unit price of a product is determined on the basis of unit cost
of the product. When price is fixed on the basis of price fixed by
competitors, it is competition oriented pricing. For pricing decisions, a
proper understanding of consumers and competitors is crucial. The
competitors' likely reaction to price changes should be kept in mind when
taking pricing decisions. |
|
Short Case Studies / Caselets
