Question

In: Accounting

In 205-500 words Discuss the three influences on pricing decisions, as presented in the assigned reading...

In 205-500 words Discuss the three influences on pricing decisions, as presented in the assigned reading for this topic. Which do you think is most important, and why?

PLEASE ORIGINAL ANSWER DO NOT COPY AND PASTE FROM OTHER WEBSITES.

THANK YOU!

Solutions

Expert Solution

The three influences on pricing decisions are mainly caused by customers, competitors, and costs.

1. The customers can influence pricing through their demand for the product and services.It is the customer for whom the product is made or the service is given. The price that a company will set will make the customers decide about the quality of the product. Apple can sell its products at high prices because the customers think that it is of high quality whereas Samsung cannot sell its products at high prices because the customers do not think of it as a high quality company.

2. Competition affects price significantly. The company always tries to match the prices with the competitors and adjusts the prices more or less than the competitors. The company also needs to assesses how the competitors respond to changes in the prices.A company may try to decrease the price of its product in order to increase its control over the market and to increase the market share but the competitor can also do the same thing which may not give the benefit to the concerned company.

3. The cost has the power to influence the price through its effect on the supply. Cost of a company include cost of raw materials, selling and distribution overheads, cost of advertisement and office and administration overheads. It is the duty of the company to analyse costs before it sells its products. The main objective of the company is to get as much profit as possible and it may sometimes reduce the proices and thereby profits, if it can increase the profit in the long run.

The most important in all of the three cases is the cost component. It is because it is the cost of the product which is the first and the basic thing that any business will and have to analyse before stepping into any industry. The cost of the product along with the price will determine how much money(profits) will a company earn and for how long can it survive in the industry.


Related Solutions

Discuss the three influences on pricing decisions. Which do you think is most important, and why?
Discuss the three influences on pricing decisions. Which do you think is most important, and why?
Discuss the variable that influence pricing decisions (ie the variables presented within the pricing framework box)
Discuss the variable that influence pricing decisions (ie the variables presented within the pricing framework box)
What are some of the difference between demand influences and supply influences on our pricing decisions?...
What are some of the difference between demand influences and supply influences on our pricing decisions? What affect does competition have on our pricing strategy? What types of resources could we use to help us analyze the competition in the market place?
In 250-500 words Compare short- and long-run pricing decisions and provide examples of each. What are...
In 250-500 words Compare short- and long-run pricing decisions and provide examples of each. What are two alternative approaches to long-run pricing decisions? ORIGINAL ANSWER PLEASE DO NOT COPY AND PASTE FROM OTHER WEBSITES THANK YOU!
the importance of making capital investment decisions. In 500 words or more, discuss the four criteria...
the importance of making capital investment decisions. In 500 words or more, discuss the four criteria that are commonly used for evaluating and selecting projects. Briefly discuss the merits and limitations of each one of them.
Describe inequalities as presented in the assigned reading for this week. Why are some inequalities represented...
Describe inequalities as presented in the assigned reading for this week. Why are some inequalities represented with a solid point and others represented with an open point? Propose another method for representing inequalities. First ,define an inequality in general terms. Then introduce the various inequality symbols and tell what each means. Give some examples of inequalities and tell which ones might use open or closed points when graphed and explain how you know. What are some uses of inequalities in...
"Length of the write-up should be 500 words and hand writen not allowed* How thinking influences...
"Length of the write-up should be 500 words and hand writen not allowed* How thinking influences organization behavior. Explain with an example where perceptions and thinking had a strong influence on employee behavior?
How is activity-based costing useful for pricing decisions Answer in ur own words
How is activity-based costing useful for pricing decisions Answer in ur own words
Based on the theory presented by the Capital Asset Pricing Model, there are three components that...
Based on the theory presented by the Capital Asset Pricing Model, there are three components that comprise the expected return on a risky asset. Define each component and explain what role that particular component plays in determining expected return
Based on the theory presented by the Capital Asset Pricing Model, there are three components that...
Based on the theory presented by the Capital Asset Pricing Model, there are three components that comprise the expected return on a risky asset. Define each component and explain what role that particular component plays in determining expected return. Your response should be in the form of a Word or PDF document consisting of 100-300 words. Cite any sources you consult to inform your response.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT