Pricing policies Essay

The main Factors that affect the bell being shaked by your chosen business for their point of intersection/ help The pricing decisions for a product are affected by inherent and external factors. A. Internal Factors 1. Cost While fix the charges of a product, the unassail fitting should read the cost involved in producing the product. This cost includes both the varying and fixed costs. Thus, while fixing the prices, the steadfast mustiness be able to recover both the variable and fixed costs. 2. The predetermined intentions While fixing the prices of the product, the marketer should consider the objectives of the strong. For instance, if the objective of a firm is to growing reelect on investment, then it whitethorn charge a higher price, and if the objective is to capture a large market share, then it whitethorn charge a dishonor price. 3. Image of the firm The price of the product may also be determined on the basis of the image of the firm in the market. For instan ce, HUL and Procter Gamble can demand a higher price for their brands, as they enjoy goodwill in the market. 4. Product life calendar method of birth tell The stage at which the product is in its product life rhythm method also affects its price.For instance, during the introductory stage the firm may charge lower price to attract the customers, and during the growth stage, a firm may increase the price. 5. Credit period offered The pricing of the product is also affected by the credit period offered by the company. Longer the credit period, higher may be the price, and shorter the credit period, lower may be the price of the product. 6. promotional activity The promotional activity undertaken by the firm also determines the price. If the firm incurs heavy advertising and sales promotion costs, then the pricing of the product shall be kept high in order to recover the cost. B. extraneous Factors 1.Competition While fixing the price of the product, the firm needs to ponder the de gree of competition in the market. If there is high competition, the prices may be kept low to effectively face the competition, and if competition is low, the prices may be kept high. 2. Consumers The marketer should consider various consumer factors while fixing the prices. The consumer factors that must be considered includes the price sensitivity of the buyer, purchasing power, and so on. 3. Government control Government rules and regulation must be considered while fixing the prices. In certain products, government may announce administered prices, and therefore the marketer has to consider such regulation while fixing the prices.