Question

Market structure and pricing practices introduction

Answer 1

Pricing is one of the most important elements of the marketing, as it is the only factor which generates a turnover for the organization. It can be defined as "Activities aimed at finding a product’s optimum price, typically including overall marketing objectives, consumer demand, product attributes, competitors' pricing, and market and economic trends." It costs to produce and design a product; it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing should take into account the following factors:

Fixed and variable costs

Competition

Company objectives

Proposed positioning strategies

Target group and willingness to pay

An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve.




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LALITH PRIYADARSHAH