Question

what is geographic pricing and how is it used? 300 words and in own words please

Answer 1

Geographic pricing is pricing the products differently for customers located at different geographical locations There can be a number of reasons behind the price differences. First and most common reason is the difference in shipping cost, which increases the price of commodity. As a result, products are cheaper in regions near the source of production and costly at faraway places. This is particularly true for products with low shelf life and low unit price, which are difficult to be reached to faraway places from the source of production. Other reason behind the geographical price is difference in taxes and levies in particular states which make a commodity ceaper or dearer at a place. Purchasing power of the customers and consumption patterns also determine the price of commodities. For example, areas with very low socio economic level of customers might force the manufacturer to keep the prices low. Example include the commodities of essential consumption, which can be priced high in states with higher per capita income and low in poorer states. High consumption in some areas might drive the cost down due to economies of scale adopted in manufacruring it, while company might also keep the prices low in some areas to facilitate market penetration.