Question

Are there other factors besides cost and quality which influence choice of a package when pricing the product? What role does competition play in consumer price limits?

Answer 1

Factors affecting choice of packaging when pricing a product-

• Environmental conditions of the area where product will be stored. For ex: Ready to eat product that needs to stored in frozen form need an expensive retort packaging.
• Distance and method of transporting. For ex: Goods travelling long distance will need a sturdy packaging and will be priced more accordingly.
• Environment friendly packaging mandated by legislation is sometimes more costlier and makes the product more expensive.

Role of competition in consumer price limits-

Competitive pricing has an effect on the profitability of a business. It also impacts the quality of the product or service. Competition plays the following role in consumer price limits-

• Gives you a standard price range to set your own
• Give you a comparision metric to measure the performance and features of your product against the competitor's
• Competitive pricing helps in defining the target market in a better way