Pricing Strategies for Entrepreneurs 2013

Does Pricing make the designer's/brand's products/goods different from its competitors?

Prices makes product brands different in the market. Different commodities are associated with varying prices. To counter competitors a firm should ensure that their prices are reasonable and fair to the consumers.
The prices of the commodity dictate the market share a firm holds in the market. The firm that charges relatively high prices has a low market share compared to other firms in the same market for similar products. Firms must consider the prices of the competitor goods when setting the prices of their products. This ensures fair market competition and this improves the economy.

In terms of product/good marketing, how would you change the prices of the products/goods?

In any market, prices are bound to change at different times. Price changes can either an increase in price or a decrease in price. A decrease in price is either due to allowing discounts on commodities. Discounts acts as an incentive to consumers. They are willing to buy more at lower prices. Firms may increase the prices of commodities as a response to inflation. They increase prices to be able pay the expense of production. Price changes must be realistic and fair. The prices of the commodities must have a relationship between the quality and the quantity of the commodity.

Pricing strategies a firm uses

Various firms use different methods when pricing goods and services. Psychological pricing is a strategy a firm may use to make consumers make purchases on emotional grounds as opposed to making decisions on rational grounds. Geographical pricing is the strategy where the prices vary on location basis. The consumers located in far areas pay more for products. Promotional pricing is a strategy where a firm has the aim of increasing sales. The firm may use the approach of buy one and get another free approach.
Penetration pricing strategy the prices for products are set low to attract buyer and gain market. After establishing a market, the prices of the commodities are set high. The premium pricing strategy involves setting of high prices for commodities due to the unique nature of the product. This strategy works perfectly where a firm advantage over its competitors. This applies mainly to luxurious goods. Economy pricing strategy ensures that the prices of commodities are set low to ensure that consumers can afford the goods. The production expense of these goods is low to prevent losses being incurred by the firm. 

Factors to consider when developing pricing strategies

It is important to establish that there is no sequence used to create a pricing strategy. Estimation of demand curve is an important factor. This helps in comprehending the relationship between demand and the prices of goods. When developing prices it is important to come up with a market strategy. Market strategies are developed after performing market analyzing and finding a target market.
This helps to know the prices that are favorable to the consumers. Calculation of cost is important when developing price. It is important to know the variable and fixed cost of a certain product. This will ensure that the prices developed are realistic. Environmental factors, which include competitors and government legislation, affect pricing of products. This ensures that prices developed are according to the set regulations and can contour competition. Setting of price objectives is another factor to consider when developing prices. Factors such as maximization of profits and price stabilization are some objectives that a firm would set.         

Relationship between price and cost

Price is what a company charges for its products while cost is the expense a producer incurs during production of a good or service. Price is the function of supply and the demand for goods. High fixed cost acts as a barrier to production, which leads to low supply of products. Therefore, it is important that the production cost of products is relatively low as it in turn leads to low market prices for the particular product. Low cost of production will ensure that the company realizes high market prices. Prices are mainly determined by the cost of production of a given product.   

Relationship between the pricing of a firm its products, distribution and promotion

The prices that a firm sets for its products have a direct link with how a company carries out its distribution of goods and services as well as promoting the products. The revenues collected from sale of goods, services are used to cater for distribution, and promotion cost of the products. Marketing decisions have a huge impact on a firm. The prices the marking manages set for the firm will affect the various operations of the firm. Promotion of a brand increases sales of the products. Promotion may be through reduction of the prices of products. Distribution is dispatching the products from the point of production to the consumers’ location. The cost of transportation is catered for by the prices charged on the goods. 

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