The Importance Of Pricing Strategy

1097 Words5 Pages
Task 3 Market forces Current market pattern experience cycles of economic development and contraction relying on different factors. These incorporate the overall health of the markets, consumer inclinations, world news and events. Albeit a few organizations perform superior to others in their industry, the market factors that influence the business in general must be contemplated when planning to begin or grow a business. There are a couple of factor such as Interest rate, currency strength of a nation, government interference in the business or rules suggested by them and the overall economic health will influence the present market trend as these elements plays a major part in maintaining a business and surviving the business in a specific…show more content…
Companies also scale back production, hiring and the development of new products and services to ensure that their finances can weather the storm. In periods of overall economic growth, these companies once again expand. Pricing strategy There are various ways for pricing strategy such as penetration pricing, economy pricing, price skimming and physiological pricing. Pricing policy Mark up pricing Mark up pricing is a common pricing method among retailers. This way of pricing is basically just a predetermined cost even if the percentage mark-up in a retail store varies from one category of goods to another. The same percentage is often used to determine the price of items within a single. Customary Pricing This way is basically priced on the way of tradition. Economy pricing Economy pricing is basically trying to keep the costs as low as possible and this is a strategy which is very basic, low-cost approach to marketing. They will try to target the market which is price sensitive. Pricing Factors to Consider • Determine primary and secondary market…show more content…
The highest price yielded the greatest product revenue. Interestingly, the middle price yielded greater revenue over time, as it generated more customers to whom other related products could be marketed. • Monitor the market and your competition continually to reassess pricing. Market dynamics and new products can influence and change consumer needs. Factors that affect pricing strategy • The level of competition Most entrepreneurs fancy the concept of selling their products with a very high margin. This is not the way to sell unless you have a good hold in the market. You will not be able to sell in the way you just want before getting a sting from the competition. • Perceived value of your product The company must be able to price the product according to its quality if the product of the price is to low consumers might think that the quality of the product is low. This is the reason why companies must try to get a balance between the quality of the product and its price. • Product development cost The company must never label the price lower than the actual price because the actual cost price is determined by the total cost of production so the company will incur a loss if the product price is lower than the actual

More about The Importance Of Pricing Strategy

Open Document