PRICING STRATEGY Essay

PRICING STRATEGY

> > ONE OF THE SEVERAL MAJOR PORTIONS OF THE ADVERTISING

MIX IS PRICE. CHARGES IS AN IMPORTANT IDEAL ISSUE

SINCE IT IS RELATED TO ITEM POSITIONING.

> > PRICES AFFECTS ADDITIONAL MARKETING MIXTURE ELEMENTS

SUCH AS PRODUCT FEATURES, CHANNEL DECISIONS, AND

CAMPAIGN.

GENERALLY ADVISED STEPS TO BE

FOLLOWED:

• Develop marketing strategy - conduct marketing analysis, segmentation, focusing on, and positioning.

• Generate marketing blend decisions -- define the merchandise,

distribution, and promotional methods.

• Calculate the demand contour - know how quantity

demanded varies with price.

• Calculate cost - incorporate fixed and variable costs associated with the product.

GENERALLY RECOMMENDED STEPS TO BE

ADOPTED:

• Understand environmental factors - examine likely competition actions, figure out legal constraints, etc .

• Set costs objectives -- for example , profit maximization, income maximization, or price leveling (status quo).

• Determine pricing - using information collected inside the above actions, select a charges method, develop the charges, and define discounts.

WEB MARKETING STRATEGY AND THE PROMOTING MIX

• Before the method developed, the marketing strategy is formulated, which include target market variety and product

positioning. Generally there usually can be described as tradeoff between product

price and quality, so cost is an important variable in

placing.

• Because of inherent tradeoffs between marketing mix

factors, pricing would depend on other product,

distribution, and promotional decisions.

ESTIMATE THE NEED CURVE

• Because there is a relationship among price and quantity required, it is important to know the impact of

pricing about sales by estimating the demand curve intended for the

item.

• Intended for existing goods, experiments can be performed at

prices above and below the current price to be able to

determine the purchase price elasticity of demand. Inelastic

demand shows that value increases may be feasible.

COMPUTE COSTS

• If the firm has chosen to launch the item, there very likely is at least a basic understanding of the costs included, otherwise, there can be no revenue to be made. The unit expense of the

merchandise sets the low limit of what the company might charge, and can determine the profit perimeter at larger prices.

• The total product cost of a producing a system is composed of the variable cost of producing each additional unit and fixed costs that are incurred regardless of the amount produced. The

pricing plan should consider both types of costs.

ENVIRONMENTAL FACTORS

• Pricing need to take into account the competitive and legal environment when the company works. From a

competitive standpoint, the organization must consider the effects of the pricing around the pricing decisions of competitors.

• For example , setting the cost too low might risk a cost war that may not be in the best fascination of possibly side. Placing the price way too high may attract a large number of competitors who desire

to share inside the profitsВ. В

ENVIRONMENTAL ELEMENTS

• From a legal viewpoint, a firm is usually not liberal to price its products at any level it chooses. For example , there may be selling price

controls that prohibit pricing a product too much. Pricing that too low can be considered predatory pricing or perhaps " dumping" in the

case of intercontinental trade. Providing a different selling price for

several consumers might violate laws and regulations against cost

discrimination. Finally, collusion with competitors to repair prices in a agreed level is illegitimate in many countries.

COSTS OBJECTIVES

The firm's charges objectives should be identified to be able to determine the perfect pricing.

Prevalent objectives include the following:

COSTS OBJECTIVES

Current profit maximization

> > seeks to maximize current earnings, taking into account

earnings and costs. Current revenue maximization may well not

be the very best objective whether it results in reduce long-term

earnings.

PRICING TARGETS

Current income...



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