Pricing represents the exchange value of goods and services in terms of money. It is an important component of marketing mix of a firm. Determining the prices of different products of a firm is a very difficult task of the marketing manager simply because a new product has never had a price before.
The marketing manager has to do a lot of exercise to determine its price. He may pull a price out of the air because it sounds right but this approach may lead to the failure of the firm because low pricing would lead to huge losses and high pricing may turn the firm out of the market.
The marketing manager may also decide to follow the competition or may decide simply to charge as much as he can get. Both these approaches are also not sound and they may threaten to undermine the long run survival of the firm.
An innovative marketing manager determines the prices in such a way that the firm is able to sell its products successfully and achieve its overall objectives. He tries to maintain optimum relation between pricing and other components of the marketing!
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9 Comments. Leave new
Good work.
Prices actually depend upon a lot of factors, starting with the basics like Marginal Cost, Average Fixed Costs etc., and getting into something as complicated as Marginal Social Cost. Only if it was so easy to determine one right price for every product!
Nice work..
nice article about pricing…….pricing of new products and services has always been hard
Nice!
Interesting Topic 😀
good work.
nice work… Great Effort
nice one…