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Pricing objectives Pricing Before determining the price of the product, companies must determine their pricing objectives and what they want to achieve. There are many pricing objectives such as: Increase profits. Increase sales volume. Price stabilization. Leadership and quality. Increase profits It depends on knowing the costs necessary for the production process and the revenues obtained by the company, and thus knowing the percentage of the company’s profits. Increase sales volume The company may seek to increase its market share by reducing the price of products, increasing the quantity of products sold, and gaining more new customers in exchange for sacrificing profits. Price stabilization At this stage, the company is reassured of the stability of the price and then competes in the market with other factors.
Leadership and quality Customers often associate quality with high prices, so many companies seek to raise the prices of their products in order to build a mental image associated with high quality among customers. Factors affecting the pricing process Determining the price Nigeria Email List of the product is linked to conducting a comprehensive market study to answer many questions such as: What is the cost of the product? What is the value provided to customers? Will lowering the price increase its market share? What are competitors' prices? Can your price compete in the market? There are also other factors that affect the pricing process and can be classified into internal factors and external factors: Internal factors These are the factors that are under the company's control, although it is difficult to control them completely, such as: Fixed and variable production costs. The goals of the company. Targeting decisions for customers and where to target them. External factors These are the factors that greatly affect pricing decisions, but the company cannot fully control them, such as: Competitors. Market conditions and economic situation and how it affects the purchasing power of customers. Marketing laws and regulations. By knowing the pricing objectives and factors affecting the product pricing process, the appropriate strategy for the product and the company’s plan can be developed. Pricing strategies .
There are many strategies that a company can use in pricing its products, including: Market Skimming – Price Skimming. Market Penetration – Marketing Penetration Pricing. Product Line Pricing. Bundle Pricing. Psychological Pricing. Value-based pricing. Dynamic Pricing. International Pricing. Premium Pricing. Pricing according to market segment - Segmented Pricing. Promotional Pricing - Discount/Promotional Pricing. Market Skimming – Price Skimming It depends on the company initially releasing the product at a high price and then reducing the price of the product or issuing a lower-quality version for other segments in the market. An example of this is technology companies such as “Apple”, which releases a new product with new technology at a high price and with the product spreading widely in the market. Markets: The company reduces its price. Market Penetration – Marketing Penetration Pricing This strategy is the opposite of the previous strategy, where the company initially releases the product at a low price in order to gain a large market share of the market and sell many products in order to compensate for the loss resulting from reducing the price.
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