This is the amount of money charged for a good or service. This is the sum of value consumers exchange for the benefit of having or using a good or service. This is the market value of a product as it is offered in market.
FACTORS AFFECTING PRICING DECISIONS/FACTORS TO CONSIDER WHEN PRICING
- Marketing objectives – a marketer must consider the marketing mix in terms of product design, distribution and promotion in order to form a consistent and effective marketing programs
- Cost – consider the cost of production, cost of distribution and marketing expenses.
- Profit maximization – the management must consider profits expected before setting the final price.
- Organizational considerations – prices must always be set by management rather than by the marketing department/sales department.
- Market and demand for the product – a marketer must understand the relationship between price and demand for the product (factors affecting demand).
- Environmental elements – prices must take into consideration the existing competitors prices.
- Prices of substitute goods
- Intermediaries demands
- Suppliers – if an organization suppliers notice that prices of an organization products are rising, they may seek a rise in price of their supplies(inputs) to that organization
- Inflationary conditions prevailing in the country
- Income effects of the consumers.