FACTORS THAT AFFECTING PRICING DECISIONS

FACTORS THAT AFFECTING PRICING DECISIONS

There are many factors that affect the pricing decision of one company towards its product. Before setting a price, the company must decide on its strategy for the product. If the company has selected its target market and positioning carefully, then its marketing mix strategy, including price, will be fairly straightforward. In transportation perspectives, there are some aspects which enlighten to be the main factors. A company should take overall aspects in order to have the best solution of setting the price of the product by taking the environment aspects. Here we will explain more on the topics that affect the pricing decisions. 

Among the factors that will affect the pricing decisions are the customers. Before setting the costing and pricing, usually they do a survey on the price at the market area. This can be done by interviewing, research and many more by the marketing department. After they done the research, then they can assume the prices that can be stated for sales in the market. Next, another view that a company must highlight the most is government where they control the price of the product in the market. For example, in festive season especially, most of the price of convenience goods is standardize by the government. The seller does follow the market price which restrict by the government.

Somehow at one point a company must follow the price of competitor. In transportation view, they must look on their competitor’s price to assure that their company able to compete with others. For example, the prices of a cup of tea are different at certain place where the seller follows their competitor price. Besides that, the determination of the product is based on the quality of the product. That’s include the dependability of the goods on how long it can be used. The brand power that is used at some branded items where they charge based on the brand of the product.

On association perspectives, usually payment that are made to whom join the club are cheaper than the one who are not joining. Basically, the prices are differing based on the association of the person. For foreign exchange, the price based on the depreciation economy. If a country virtually depreciates promptly thus the shipper needs to follow the regulation of the country they want export to. Carriers must take fast respond on changes and directions from their operating environment. Somewhat, environmental perspective thus take a big responsibilities in many view of pricing. Carriers or shipper must alert on this kind of regulations.

Having a pricing objective isn’t enough. A firm also has to look at a myriad of other factors before setting its prices. Those factors include the offering’s costs, the demand, the customers whose needs it is designed to meet, the external environment, such as the competition, the economy, and government regulations and other aspects of the marketing mix, such as the nature of the offering, the current stage of its product life cycle, and its promotion and distribution. If a company plans to sell its products or services in international markets, research on the factors for each market must be analyzed before setting prices. Organizations must understand buyers, competitors, the economic conditions, and political regulations in other markets before they can compete successfully. Next we look at each of the factors and what they entail.