PRICE /PRICING of a PRODUCT

Principles and Practices of Marketing

This is the amount of money charged for a good or service.This is the sum of value consumers exchange for the benefit of having or using a good or service. This is the market value of a product as it is offered in market.

FACTORS AFFECTING PRICING DECISIONS/FACTORS TO CONSIDER WHEN PRICING.

  • Marketing objectives-a marketer must consider the marketing mix in terms of product design,distribution and promotion in order to form a consistent and effective marketing programs
  • Cost-consider the cost of production,cost of distribution and marketing expenses.
  • Profit maximization-the management must consider profits expected before setting the final price.
  • Organizational considerations-prices must always be set management rather than the marketing department/sales
  • Market and demand for the product-a markter must understand the relationship between price and demand for the product(factors affecting demand).
  • Environmental elements-prices must take into consideration the existing competitors prices.
  • Prices of substitute goods.
  • Intermediaries demands
  • Suppliers-if an organization suppliers notice that prices of an organization products are rising,they may seek a rise in price of their supplies(inputs) to that organization
  • Inflationary conditions prevailing in the country
  • income effects of the consumers.



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