Question

Why is price such a difficult variable for marketers to control? What factors must they consider in setting prices?

Answer 1

• Demand of the product is dependent on the price. Slight fluctuation in price will affect the demands. That is why the price is very sensitive for the marketers. If the price is low then the customer will perceive the with poor quality, and if the price is high then the customer will not buy because of the overpriced.
• The marketers should take care of profit margin for them because profitability depends on selling price. Further margin for the mediatory such as wholesalers, retailers etc should be good so that they can give preference to the company product otherwise they will not sell the product interestingly. Marketer should analyze the purchase capacity of the citizens well.
• In order to c0omepte in the market the marketers has to reduce the price than the competitors. For that they have to continue searching for those factors which will affect the cost of the product.

Here are the factors which should be taken care while pricing the product.

Cost- Cost is the amount at which one unit is produced. The marketer has to analyze and lower the cost so that the margin can be increased or price can be lowered.

Competing Products- As I have discussed above it has to be analyzed that at what price the competitor is selling.

Product Positioning- Price creates the perception about the company in the consumers mind. If price is lowered consumers assume that the company is selling cheap products and if higher then mass market will not prefer.

Product Positioning- Price creates the perception about the company in the consumers mind. If price is lowered consumers assume that the company is selling cheap products and if higher then mass market wills not prefer. So while pricing the product, product positioning should be considered.

Consumer Demand- At what price customer is asking the product should be considered while pricing.