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pricing

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3 views

New Text Document

pricing

Uploaded by

saurav
Copyright
© © All Rights Reserved
Available Formats
Download as TXT, PDF, TXT or read online on Scribd
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pricing A pricing strategy is a course of action framed to affect and guide price determ inationdecisions.

These strategies help to realise pricing objectives and answer different aspectsregarding how will price be used as a variable in the marketin g mix, such as new productintroductions, competitive situations, government pric ing regulations, economic conditionsor implementation of pricing objectives. A p ricing method is a mechanical procedure forsetting prices for specific products on a regular basis. Price Competition There is tremendous price competition in free market economies all around the wo rld. Acompany can use price to compete by changing its prices or by reacting to price changesby competitors. This influences decisions concerning other marketin g mix variables. Typically,price-based competition occurs when consumers cannot readily differentiate betweencompetitive offerings. In this situation companies use price as a tool to differentiate itsproducts from competitors products to bea t or match prices set by competitors. To adopt this competitive approach, a comp any should be low-cost producer. In case all competitorscharge the same price, t hen the company producing at the lowest-cost would be mostprofitable. Companies adopting price-based competition tend to market standardisedproducts and are gen erally adept at frequently adjusting prices or quite willing to do so.A company adopting price-based competition can exercise flexibility in making adjustmentst o changes in company s costs or product demand. Over the time period most companie smanage to lower costs at varying levels and are able to adjust prices. Too freq uent pricereductions sometimes lead to price wars and weaken companies. In India , Coke andPepsi occasionally indulge in price-cutting, attempting to take advant age. The day, oneof them announces price reduction the response of the other com pany is immediate andapparently neither firm gains advantage.

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