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Factors of Marketing

In: Business and Management

Submitted By ace10016
Words 710
Pages 3
There are many factors that determine the price of a product or service. In the world of business, product and price are part of the 4Ps of marketing. The strategic pricing of your product is such an important part of a business building process that it’s value and importance can never be over emphasized. The price of your product can either make or break your business so it should be handled carefully. A company like Wal-Mart have gained and retained leadership position in it’s industry simply because of their unique pricing strategy. They devised a unique pricing strategy that sets them apart and gives them a competitive edge. Your adopted product pricing strategy can give your company an unfair advantage just like Wal-Mart and that’s why most businesses try to compete at the price level. “ There is one rule for the industrialist and that is: make the best quality goods possible at the lowest price possible, paying the highest possible wage.”- Henry Ford.

There are several factors that influence your product pricing strategy but it’s up to the company to decide if the influence is going to be positive or negative.

The level of competition: Most businesses love the concept of selling products with a very high margin. This idea can be realistic when you have a strong hold on the market, but if you don’t you cant sell with your desired profit margin without getting a sting from the competition. When trying to come up with a pricing strategy for a product or service, competition is a factor that must be handled effectively. The more intense the competition in you industry the more flexible you product pricing strategy and policy will have to be.

The perceived value of the product: You have to ask yourself this question, “what is the perceived value of my product or service to my customers”? You must find a good and definite answer tot his question before

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