Price Value Of A Product Or Service

The key to successful pricing is to match the product with the consumer's perception of value.

Price is an important factor in Burberry as price affects the value that costumers perceive they get from buying a product (Jobber & Ellis-Chadwick, 2012). Burberry uses competitive pricing similar to its competitors which produces a psychological effect on Burberry customers (Jacobson, n.d). If Burberry for example lowered its price dramatically then customers may believe the quality has decreased and may presume it’s not worthy to be named a luxury brand. However by being expensive it suggest better quality and desire to sustain its customers as well as making there products seem exclusive.

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.

Pricing strategy associated with services is typically more complex than the pricing of tangible goods. As a consumer, what pricing issues do you consider when purchasing services? How difficult is it to compare prices among competing services, or to determine the complete price of the service before purchase? What could service providers do to solve these issues?

SUMMARY OF CH.10 Pricing strategies: Price: is an amount of money that the consumer is paying for a product or a service. Costumer value-based pricing: to determine the price of product or service we have to consider the customer expectations of the value not the seller’s cost. Good-value pricing means the balance between good quality and service, decent price for both the customer and the company in order for it to gain profit.

Describe and give examples of some of the following types of pricing objectives: profit, market share, competitive effect, customer satisfaction, and image enhancements.

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

A firm’s pricing decisions reflect the pricing objectives set by management. Some firms pursue the goal of maximizing profits, while others aim to maximize market share. Additional considerations include survival in a competitive market, social and ethical concerns, and image. Important price-setting approaches include cost-oriented pricing and breakeven analysis. For new products, pricing strategies include price skimming and penetration pricing, while tactics include price lining, psychological pricing, and discounting. E-commerce has reintroduced dynamic pricing to the U.S. marketplace, allowing sellers to alter prices on a consumer-by-consumer

What is the ‘Price’ of a product? How is the price of a product determined? Why is the price of an Apple iPhone relatively higher than the price of other Smartphone having the same or even more features? Read on …

As mentioned in the literature review valued items the company will have to use value based pricing strategy where customer perceived value are protected.

In other words, cost-based pricing can be defined as a pricing method in which a certain percentage of the total cost of production is added to the cost of the product to determine its selling price. Cost-based pricing can be of two types, namely, cost-plus pricing and markup pricing.

Source:http://www.smallbusinessnotes.com/operating/marketing/pricing/valuebased.htmlHow high can a price be before the product or service is priced out of the market?To understand the customer 's perception of the value of your product or service, look at more subjective criteria such as customer preferences, product benefits, convenience, product quality, company image and alternative products offered by the competition. * How do your customers describe what they get for their money? * Do they save a great deal of money or time by purchasing your product or service? * Do they gain a competitive advantage from

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.

It is the simplest cost to calculate, once your complete costs are known and your desired rate of return is established. However, it fails to take marketing vision and market conditions into consideration. For example, the competitive environment is neglected, as is the value of the product or service to your targeted customers. Markup pricing is a cost-plus pricing strategy in which you apply a predetermined percentage to a product’s cost to obtain its selling price. Markup pricing is described in greater detail later in this

Price, which is one of the most important elements of the marketing mix, can be difficult to get right. Pricing too high, or low, can negatively impact on customer satisfaction and revenue. Adopting a pricing strategy is necessary to achieve desired sales objectives (Chan & Wong 2005).