Pricing

Pricing is an important variable to the marketing mix. When it comes to product decisions, price is a key component. There are many pricing objectives, there are seven that come in this category. The pricing objectives consists of the survival of the product, profit, return on investment, market share, cash flows, status quo and product quality. When any price is set the firm must evaluate competitors prices. Find out information about competitors prices is apart of market research. It is very important for a firm to know what their competitors prices are. By knowing competitors prices it helps marketers to set competitive prices for their products. Sometimes, depending upon the product, it can be an advantage to set your price at a higher price than their competitors and at a lower price than their competitors. For example, Fuji water is viewed as a pure, elegant type of water. The price of Fuji water is much more expensive than say poland springs. Since the price is higher than most competitors, customers will think that Fuji water is "better" than the poland springs water. There are both different dimensions to pricing as well as a basis for pricing. The three different dimensions of pricing consists of cost, demand and competition. The bases for prices are made up of the type of product, the market structure of the industry, the brands market share relative to competing brands, and the customer characteristics. There are also three different types of cost-based pricing. Cost-based pricing is the dollar amount to the cost of the product. Cost-plus pricing is adding a specified dollar amount to the seller's cost. Lastly, markup is adding to the cost of the product a predetermined percentage of that cost. If a company didn't conduct any research before pricing their product do you think the product will be a success or failure?