Marketing Management
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Details
Textbook:
Pages : 500;
Paperback;
210 X 275 mm approx.
Workbook:
Pages :
282; Paperback;
210 X 275 mm approx, Sample Applied Theory Questions
Pricing
Textbook Price: Rs. 900;
Workbook Price: Rs. 700;
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Detail Table of Contents
Pricing and Marketing : Chapter 15
SUMMARY:
Pricing of products and services is a crucial issue for managers and involves a thorough and a deep understanding of principles and practices governing the business environment. Arriving at the right price for the products is a challenging task for managers.
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Marketers should develop pricing objectives for setting the prices. Various pricing objectives can be survival, achieving profits, attaining higher returns on investment, or increasing the market share,and so on. It is important for marketers to determine the factors affecting the demand for their products and services.
Price sensitivity exists when the demand for a product falls with an increase in its price and when the demand for the product increases with a decrease in price of the product. It is important to observe that such rise and fall in demand with increase or decrease in price of the product occur as long as there is no change in the marketing environment and the buying patterns of customers.
Firms use various methods to measure the demand curves. They may statistically analyze past prices, volumes sold and other factors to estimate the price-demand relationships. The price elasticity of demand is said to be the percentage change in quantity demanded divided by the percentage change in the price of that good.
Marketers must carefully analyze the competitors’ reaction to the company’s pricing policies. Companies have various options for selecting a pricing method. These include mark-up pricing, target return pricing, perceived value pricing, going rate pricing, sealed bid pricing, differentiated pricing and value pricing.
Further, the selection of a pricing policy depends on its internal and external environment. Psychological pricing is where the price is fixed at odd numbers for the products. Another type of pricing policy is transfer pricing, where one division of an organization transfers or sells goods or services to another division. The price charged by the division for such transfer is called transfer pricing. The influence of other marketing mix variables on price is rather high. While setting the price of a product, all the other variables of the marketing mix, like the product features, production costs, distribution costs and the promotional and advertising expenditure should also be considered.
Companies normally adopt a pricing pattern on the basis of aspects like geographical factors, demand patterns of the customers, service levels that have to be delivered, pricing to improve short term sales, and so on. The popular methods adopted by marketers to fix the price of their products and services include geographic pricing, promotional pricing, discriminatory pricing, discounts and allowances, experience curve pricing and product mix pricing. Marketers sometimes face situations wherein they may have to increase or decrease the prices of the products and services they offer. The effects of these price changes have to be carefully studied in the light of perceptions of the buyers as well as competitors reactions.
