Pricing of Products:
Pricing isn’t just about a number. There is a lot of approach involved. Price of product refers to the amount of money customers have to pay to acquire a product. Good pricing strategy helps you determine the price point at which you can maximize profits on sales of your products or services. Price is a significant factor affecting the achievement or failure of a product in the market. The demand for a product or service is related to its price.
Though pricing strategies can be complex, the basic rules of pricing are straightforward:
- All prices must cover costs and profits.
- The most effective way to lower prices is to lower costs.
- Review prices frequently to assure that they reflect the dynamics of cost, market demand, response to the competition, and profit objectives.
- Prices must be established to assure sales.
Generally lower the price, higher would be the demand for the product and vice-versa. The marketers have to appropriately evaluate the factors determining the price of a product and take some vital decisions in this reverence, including setting the pricing objectives, determining the pricing strategies, determining the price and changing the prices.