A major consideration in business from both the manufacture’s and customer viewpoints is and has always been the price.
The issue discussed here is” should the retailer practice “everyday fair pricing” or engage in “frequent price promotions”? Is it better for a brand to raise its regular price and offer price promotions or is the brand better off offering lower regular price with limited price promotions?
In my paper I will support and argue for setting the right price, which in other words make shoppers feel they are getting a fair shake from the businesses they regularly patronize.
Importance of setting the Right Fair Price
Pricing strategies are important criteria which affects the overall success of the company. The price set is simply not a financial issue but a marketing issue that determines how the product is positioned and how the market (customers) perceives the product.
Pricing is a challenge with different implications at any stage of the business cycle, whether you are setting the prices for the first time, raising or lowering existing prices, or determining how to react to an unsteady economic climate. Overprice and you will risk losing your business to your competitors. Under price and you may inadvertently devalue your offerings.
Tom McNeil, President of Executive Career Resource Group, Wellesley, MA describes the implication of price:
1. “Your price is too high, and you knock yourself out of the game.
2. Your price is much less than the client was prepared to pay, and you lose money.
3. Your price is much less than that of your competitors, and you are perceived as offering less value.
4. The client accepts your price but then decides that your services aren't worth it, because you haven't...
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...se the average ticket value of a purchase or even purchase frequency, but thy will not be generally profitable or engage customers. To do that retailers must design loyalty programs to facilitate an emotional connection with their customers that benefits both the retailer and the customer – a state called symbiotic loyalty.”
Retailers should analyze their product mix and customer knowledge needs before positioning the price. Price has a significant influence on consumers' purchase behavior and consequently on firm sales and profits.
Frequent Price promotions in fact, condition the consumers to expect deals and get desensitized to small ones. Retailers have to think about the customer behavior they want to encourage --or conversely discourage.
The greatest influence on the context of a purchasing decision is whether the consumer believes the price is fair.
As we learned from Chapter 12, price must be carefully determined and match with firm’s product, distribution, and communication strategies. (Hutt & Speh, 2012, p. 300) Therefore, there should be a strong market perspective in pricing. In order to build an effective pricing policy, marketers should focus on the value a customer places on a product or service. One of the most effective ways to do so is differentiating through value creation.
The distribution of the product determines the pricing policy because if the seller decides to sell the product at exclusive stores then the price is likely to be high. The costs of production also affects the pricing as the higher the costs, the greater its price. The organizational goal is also a major influential factor for pricing. If the organization strives for profit maximization, then the price will be set high. However, if the aim of the seller is to survive then the price will be set...
The prices of products and services play a major role in determining how well they are going to sell. Ethical pricing strategies are adopted by the producers to earn profits without defrauding their consumers or competitors. Despite that, competitor's prices, availability, convenience and other factors tend to affect consumers’ impressions of fair prices. There are certain business laws, which protect consumers as well as competitors from the unethical pricing strategies that unscrupulous marketers attempt or wish to attempt. The businesses operating in today's competitive environment usually get tempted to try unethical pricing strategies to increase their profits as well as market share. But the companies with self-interest
There are a variety of different of pricing strategies; however, that can be only one reliable approach that suits a business or a market. Pricing a product usually include considering certain key factors like figuring who target customers are what they want, understanding the relationship between price and quality and following how competitors are changing. For many companies like Smucker’s, they use leaders pricing; what is leaders pricing? leading can be defined as the setting of prices low to attract customers into the store or to create more awareness for their product. (hills,
Are the prices offered fair? The question helps the company realize how the customers perceive the product about price.
Ramit Sethi, a personal finance advisor and entrepreneur, believes that “the best people want the best material. And when you’re ready for the best, price is a mere triviality.”
Absolute lowest price for an item can be most important for many consumers but not all consumer as it depends on factors such as income distribution and product type.
Price is what a buyer must give up to obtain a product. It is often the most flexible of the four marketing mix element that the price is the quickest element to change. A marketer can raise or lower prices more frequently and easily than they can change other marketing mix
The price must match with the product that is desired. This is called customer value. Their has to be a fair trade between the two when selling a product. A product can not be over-priced for a cheap item and can not be low-priced for a higher quality item. There has to be a balance.
Determining a price for your product or a service is among the most important business decisions. Without the right price, you can make or break a business. It can impact your sales figures, your profit margins and your ability to pay the bills, among other things.
Price is the values entirety that consumers trade for the advantages of having or utilizing the product or services. Different places and cultural have different spending culture. Therefore the price has to be relevant according to the product offer because it can reflect the image of a
With supply solely, factors involved with regulation of the supply also control some aspects of demand. Things such as production costs and desired net profit can determine whether a business succeeds or not. Having a balance between quantity and price is the greatest control any business can have. Pricing is obviously one of the most beneficial, or destructive, parts of a business. Pricing is the first and most valuable thing an individual will look at, which will overrule most other judgments based off of quality and detail. Balancing the price, however, helps to create a pristine product, with just the right amount of detail that will fuel the market, while still generating a steady net income.
In this essay I will be discussing the key factors that a firm should consider when setting the price of a product. I will examine what the most important factors are and how they contribute to the pricing of a product. Pricing of a product whether it is for a small business or a large business a pricing of a product is a very important element of any successful business. I believe that there are seven key points to pricing a product and I will explain them and analyse these below.
The price is the amount customers pay for a product. The cost is the amount spent by a business making the product. However, a firm needs to take account of the cost of production when setting price to ensure that it is making a profit on the products it offers. The price a business charges for its product or service is one of the most important business decisions management take. For example, unlike the other elements of the marketing mix (product, place & promotion), pricing decisions directly affect revenues rather than costs.
Pricing is generally understood by the market. There is a certain range, or ballpark figure, that is accepted. This range is what the buyer will pay. If your price is not in this range, or in other words, "out of the ballpark," you run the risk of your customers thinking something is wrong with your product because it is not priced high enough, or that they are paying too much for your product if it is priced higher than the established range. Therefore, you must price within the accepted range for each product. Obviously, if you can add additional value to the product or service you are selling, you may be able to come in at the high end of the range, or even surpass it because of the real or perceived additional value. And do not forget that you can experiment with higher prices to increase profits. You can always cut them back if you find you are edging out of the ballpark.