Disadvantages Of Pricing In Marketing

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.

People Will Pay a Little More for Perceived Value

As long as you are still in the ballpark, customers will pay additional sums if they feel they are getting their money 's worth. They will not pay a lot more, but they will pay more. An example of this is between store brands and national brands in the supermarket. Consumers pay a little more for the "real" brand. Pricier box seats are purchased when customers feel they are getting more for

Compare that image to the image that arises when you hear Honda, Toyota and Hyundai? It is not that the latter cars lack quality, but the first three project prestige. The high end expensive cars are not purchased just to get a person from point A to point B. Even if people do not admit it, they are often purchased to impress friends and neighbors. When people want to impress others, they purchase those items that offer prestige, whether it is a Mercedes or Dom Perignon champagne. If the product projects an image of prestige for the purchaser, higher prices can be