Ad Spending: A Primer
The advertising budget is a residual expense. This means that every additional dollar that is spent on advertising comes straight out of the profit. Also, if advertisements are done cheaply, it straight away impacts the bottom line. This is the reason why fourth quarters traditionally have lowest advertising spends. If companies know that they are […]
Importance of Whistleblowers in Contemporary Times and How to Deal with Them
Whistleblowers and Whistle Blowing in Contemporary Times We often hear the terms, whistleblowers, and the practice of whistleblowing mentioned in the media and in assorted publications. Further, we also hear how whistleblowers have brought to light instances of wrongdoing and other aspects to do with violations of corporate governance. For instance, in 2017, the Indian […]
13 Most Common Advertising Techniques Used by the Advertisers
Today every company needs to advertise its product to inform the customers about the product, increase the sales, acquire market value, and gain reputation and name in the industry. Every business spends lot of money for advertising their products but the money spent will lead to success only when the best techniques of advertising are […]
Sources of Data
Sources of Primary Data The sources of generating primary data are: Observation Method Survey Method Experimental Method Experimental Method There are number of experimental designs that are used in carrying out and experiment. However, Market researchers have used 4 experimental designs most frequently. These are – CRD – Completely Randomized Design RBD – Randomized Block […]
Role of Family in Consumer Behaviour
No two individuals have same buying preferences. The buying tendencies of individuals vary as per their age, need, income, lifestyle, geographical location, willingness to spend, family status and so on. An individual’s immediate family members play an essential role in influencing his/her buying behaviour. An individual tends to discuss with his immediate family members before […]
Marketing mix for companies comprises of 4 Ps Product, Price, Place and Promotion. Price is directly related to bottom-line of any business. Profitability of product is required for future operation of the company. Price strategy should communicate to the customer the value company is providing.
There is in-numerable price related challenges in the market for companies. Furthermore, with the advent of internet customer awareness for pricing information has improved. Sites like Priceline and eBay are encouraging customer to name their price for products as well as services.
Pricing strategy is dynamic in nature and should reflect changing condition in competition as well as the market. Overall price strategies follow six step model:
Companies need to plot the demand curve with respect to price as to understand price sensitivity. This demand curve can be estimated using statistical methods by analyzing historical data or by perform price related experiments to understand what customers are willing to pay or through market research and putting the question directly to the customer.
Generally, it is observed that production level increase cost per unit decreases owing to the learning curve effect which comes through experience. Activity based costing is getting in prominence as to allocate the cost properly which helps in estimation profit correctly.
Another way of cost setting is through the target costing, made famous by Japanese companies. In target costing companies set price and profit level. After which they concentrate on cost as to maintain the profit level.
Perceived value pricing method talks about setting price based on the perceived value in consumer price and companies ability to deliver that value.
In value pricing method, companies charge lower price for high quality product from loyal customers. This method is usually seen in the super market. Auction type pricing, going rate pricing and group pricing are other pricing methods.
Pricing should adapt to factors like geographical location, market segment and economic conditions. Companies should remain flexible towards pricing policy and change as per market dynamics. Companies should also not react blindly to price change by competition rather should focus on analyzing the underlying motives.
Your email address will not be published. Required fields are marked *
