PricingPricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. Pricing is the base of any business, and determines the income of the business.
Characteristics of pricing used by a business, should attract the customers attention and enforces the idea of "value" for the money. One should consider the cost to produce, competitor prices and what customers are willing to pay. When prices are already set for products, the things that will end up being added to the price are goods/services, any additional services or warranties, and customer benefits. This tends to happen for businesses such as nail salons, where getting one’s nails done is already a certain price, and then as one is adding services, the price will add on.Pricing affects the quantity of the product that the customer will buy. Will the company sell enough to make a product? Companies have to decide on whether to expand or close a product line based on the amount of the product being sold, and how much money they make from the product. Pricing is also affected by shipping products long distance, knowing what customers are willing to pay, what competitors are charging, and determine shipping costs.These factors can lead to an increase or decrease in a product’s price based on a customer’s wants. Promotion is has a major impact on pricing, consider if the company is coming into a new market, and what the competition is doing. Promotion is activity that supports or provides active encouragement for the furtherance of a cause, venture, or aim. Business use promotion to take a leap higher in the market from their competitors. Pricing objectives are goals a company hopes to achieve through pricing decisions. Companies tend to set pricing objectives early on in a products life, and they tend to change the objectives as the market changes. Pricing objectives are very important for the a product to stay around, and for a company to make money on the product. |