Notes on Pricing Strategy

product and starting a price war with competitors that would damage margins. In addition, a low priced

Prices of the different products and services of the organization should be market specific. The economic capability and disposable income of clients should be put into consideration in setting prices for the products and services offered by the organization. By matching prices with the economic capability of a people, it would be much easier to for customers to access the products and services without straining or having to compromise and going for other products of lower quality (Donna, 2012).

Price is the cash expenditure plus taxes that consumers have to pay for a good or service.

Pricing is a relevant issue in procurement at all levels. Individuals purchasing the commodities of an organization should receive clarity on pricing. There is confusion in this

When trying to determine the correct price, a number of factors must be considered: the market and its segments, the size of each segment, the ability to reach each segment, what distribution channels to target, whether to vary price by segment, the usefulness of promotional offerings, and whether the goal is to skim or penetrate each market.

the psychological meaning of a product to customers. On the other hand, cost is related

“Ensuring the requisite skills” - disagreement on price with Sales, Design, and Development teams causes conflict and lack of collaboration;

To have students analyze the product’s image, packaging costs, and design, in its relation to setting a price (and applying “just noticeable differences” in product pricing and packaging).

|PRICE |Pricing Strategy, terms, bundling, internal gross |The product looked and felt the same as the consumer product |

As is known, pricing is one of the most important steps for business plan which needs good research, calculations and formulations. There are different pricing strategies to put into effect due to the market and product conditions, such as premium pricing, penetration pricing, economy pricing, price skimming(Voice Marketing, 2012). These four pricing strategies are main pricing policies. They form the bases for the exercise. However there are other important approaches to pricing. These pricing strategies are: Psychological pricing, product line

prices/value: The price of the products need to be reasonable compare to the value and quality it has. The consumer will also compare the price with other competitors and its quality and efficiency of the products. The company need to

The strategy for setting a product’s price often has to be changed when the product is part of a product mix. In this case, the firm looks for a set of prices that maximizes its profits on the total product mix. Pricing is difficult because the various products have related demand and costs and face different degrees of competition.

Quite often, consumers purchase goods and services based on their perceived need. Upon making the decision that a need is present and a solution is available consumers are more equipped to react to that need. Although previously perceived that consumers will normally accept prices as presented by suppliers that remains to not be the case. Consumers assess and process prices based on past purchases and other psychological process they went through previously such as persuasive marketing strategies, accessibility of the goods or services and possibly information gathered from prior purchasers of a product. There are countless options that are available to consumers. Consumers are then faced with the choice of choosing the product that best fulfills their need at that given point. Consumers who are knowledgeable regarding prices will be aware of the approximated price for products (Zhao, Zhao & Deng, 2015).

Keeping these realities in mind, it is very much obvious that for this market, we choose and follow a value based pricing and do not keep the price of the product too high. It is advisable rather to follow an average pricing and let the consumers build some enthusiasm around the product.

Briefly describe the pricing structure that is used with this product and explain the benefits of this method.