How to set a PRICE for the product

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Re: How to set a PRICE for the product

#1 Postby Nidhiimtn » Mon Nov 24, 2014 4:18 am

The best strategy of setting a price is what we all know as Target Pricing.

We may simply design the product ourselves at a certain cost, add some margin to it and then try to sell the product at this margin added price. But the real question is, will anyone buy it??

There are chances that customer might not perceive a product the way you expected them to. And it’s a known fact that customers are least bothered about what cost you have incurred. The only thing they are concerned about is what value a product delivers to them and they will only pay the price on the basis of that value.
So it’s better we first go to customers and get to know what the maximum price they are willing to pay for certain product and then add some margin to it and design the production process such that our cost ensures our margin at customer given price.

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Re: How to set a PRICE for the product

#2 Postby mohitimtn » Sat Nov 22, 2014 7:24 pm

Price, the most important and key factor for any product to get sold. But, the main problem arises when, how to set a price for that particular commodity, either by comparing to the competitor's product or by just because of the popularity or demand forsay of that product. So, the question is still here "how to set a price for the product"?. What could be the possible ways are: Firstly, try to find out how essential is that product, which means is there any alternative available for the same product or not, (for eg. inverters are alternative source of electricity) if yes then price should be set accordingly because people will automatically choose the best option available whether its the product itself or its alternative. Secondly, to whom and to which market it is going to be served, which means according to the environment, country and segmented and targeted group of people. Thirdly, how this price is going to affect the reveue of my firm, is that price covering all my price that has been incurred in the production of it or not and Lastly, what are the features which my product has is altogether different form your's. Because, its not possible to capture the whole market untill it is monoply and one can set price of its own, but its a market where one has to prove that I am better than you not in the terms of price (by setting up lower than your's) but also in the terms of customer satisfaction.

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Re: How to set a PRICE for the product

#3 Postby Sindhuja » Tue Jul 29, 2014 1:50 pm

According to my opinion, before setting the price for a product he should keep in mind about the expenses incurred while manufacturing the product like the raw material cost, labor, machinery cost and for the advertising the product. And also the demand for the particular product in the particular area. Based on these things he should set the price of the product.

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Re: How to set a PRICE for the product

#4 Postby vitaj » Mon Jul 28, 2014 7:26 pm

There are two strategies to setting up the price. First by setting the price at a level lower than your competitors so that their consumers can be attracted towards you. Also, this strategy is used by companies when they want to earn revenues layer by layer. This strategy is called market-skimming pricing. The second strategy is market penetration pricing where the manufacturer charges a premium for its products and services. As the product is new, he want to gain as much as possible.

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Re: How to set a PRICE for the product

#5 Postby ISTTMVINAY457 » Fri Jun 20, 2014 9:24 am

Price is nothing but the amount of money charged for a product or service. Price and marketing mix, these elements are very important for revenues. Pricing decision is important to increase the revenues. Pricing decision will depends upon internal factors and external factors, we can decide price of a product based upon cost based approach, buyer based approach, and competition based approach

We should take care of these factors when we are going to set price for a product or service.
Internal factors like: - Marketing objectives, Marketing mix strategy, Cost (Variable, fixed, total cost)
External factors like: - Nature of the market demand, competitions, and environmental factors (Economy).

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Re: How to set a PRICE for the product

#6 Postby Priya16 » Thu Jun 19, 2014 10:29 am

price is the amount of money paid by the consumer for the products and services bought by them. According to me, I believe price can be set of a product by seeing what maximum price can be paid by the consumer. The highest price paid by the consumer. This helps you to determine the correct prices of the products and services. Moreover, we should conduct the survey of the competitors and find out the price set by them. This helps us to coat the lower price than the competitors so that consumers can come to us to buy products and services. However, there are different economic tools to establish a correct price. Difference between demand and supply and many such tools can help us to evaluate the price for the product. We can aso take feedback from people when we distribute the products and services as free samples. Feedback from people is the best tool to fix a price. The tool is by the consumers, to the consumers.

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How to set a PRICE for the product

#7 Postby shalini1792 » Tue Jun 17, 2014 9:46 am

PRICE of a product is the most important thing to decide upon before getting the product marketed in the market or put to sales. Every organisation put such prices which includes all there overheads costs and fixed cost and then charge the over the cost margins so that they could earn profit for the same in the market. But at the same time they also keep a check that the price is not so high for the consumers which makes them feel the worth of the product against its price . Hence, the organisations can put following things into mind while setting the price for the product :

1. Establish the pricing the goals.

2. Estimate the demand for the product, its cost and the profits.

3. Choose a price strategy to help in determining the base price.

4. Fine tune the the base price with the pricing tactics.

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