PRICING, STRATEGIES AND POLICIES

BY

MASOOD BABARM.COM (PREVIOUS)

WHAT IS PRICE?

“ The amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service.”

Price is all around us. We pay rent for our apartment, tuition for our education, airline, railways, buses charge you a fare, local bank charge interest for the money a fee to your doctor etc. Thus price is not just a number on a tag or an item.

Traditionally, price has been the major determinant of a buyer’s choice & is theonly element in the marketing mix that generates revenue. Pricing acquires itsimportance on account of yet another factor. It is a highly risky decision area & mistakes in pricing seriously affects the firm, its profits, growth & future.

PRICING OBJECTIVES Profit maximization in the short term. Profit optimization in the long term. A minimum return on investment A minimum return on sales turnover. Achieving a particular sales volume. Achieving a particular market share. Deeper penetration of the market. Entering new markets. Target project on the entire product line. Keeping competition out, or keeping it under check. Fast turn around & early cash recovery. Stabilizing price & margins in the market. Providing the commodities at prices affordable by weaker

section. Providing the commodities at prices that will stimulate

economic Development.

PROCEDURE FOR SETTING PRICE

Analyze Market condition.Identify Constraints.Establish Objectives.Analyze Profit Potential.Determine Initial Price Level.Adjust And Manage Prices.

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