Pricing Decisions

Topics: Marketing, Pricing, Marketing mix Pages: 3 (816 words) Published: January 27, 2013
1.Pricing decisions

Factors to consider when setting prices
All profit organizations and many non profit organizations must set prices on their products or services. Simply defined, price is the amount of money charged for a product or service. More broadly, price is the sum of the values consumers exchange for the benefits of having or using the product or service. A company's pricing decisions are affected both by internal company factors and by external environmental factors. These factors are shown in Figure 1. Internal factors include the company's marketing objectives, marketing mix strategy, costs, and organization. External factors include the nature of the market and demand, competition, and other environmental factors.

Internal Factors Affecting Pricing Decisions

Marketing Mix Strategy
Price is only one of the marketing mix tools that the company uses to achieve its marketing objectives. We have coordinated our price decision with product design, distribution, and promotion decisions to form a consistent and effective marketing program. For our product the same price will be applied in different geographical areas. If a client wants to order our Lazzzerlight Product Machine from Spain or from China, there won’t be price differences. The price will remain the same no matter the country you live in. Of course, we are not responsible for the transport of our product, which means that the client must pay a transport fee according to the country where he lives in. Costs

Costs set the floor for the price that our company can charge for the Lazzzzerlight Product Machine. We want to charge a price that both covers all costs for producing, distributing, and selling the product and delivers a fair rate of return for the effort and risk. A company's costs may be an important element in its pricing strategy. The initial price for our product is $ 300, but for additional features there will be additional costs, which means that if a client...
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