pricing

MEANING

The process of determining what a company will receive in exchange of its products is called pricing. It is a process of applying prices to purchase and sales orders. It is one of the P’s in marketing mix. It is the only revenue generating element amongst the four P’s, others being cost

centres.

OBJECTIVES

• Maximizing long-run profit

• Maximizing short-run profit

• Increasing sales volume

• Increasing market value

• Obtain a target rate of Return on Investment

• Stabilize market price

• Company growth• Desensitize

customers to price

• Match competitors price• Survival of the industry• Avoid government investigation or

intervention• Obtain and maintain loyalty and

enthusiasm of distributors and other sales personnel

• Discourage new entrants into the industry

• Social, ethical or ideological objectives

IMPORTANT FUNCTIONS OF PRICING

1. Achieving goals of a company

2. Fitting the realities of the marketplace.

3. Support product positioning

4. Carefully select the type of distribution channel used, type of

promotions used, and the quality of the product.

5. Price is relatively high if manufacturing cost is expensive

PROCESS OF fixing a PRICe

1. Understanding costs

2. Investigate competition

3. Knowing the customer

4. Frequently review your pricing strategy

5. Slash your prices at your own peril

Thank-you