Product and Price - 680 Words

Discuss the main factors affecting product pricing in the UK. †¢ Product and price: one of the 7 ps †¢ Pricing of a product is extremely crucial for a business because â€Å"the price of your product can either break or make your business†[i] †¢ Examples of any 2 companies where pricing has helped in it’s success and other where it has caused a major downfall: Wal-Mart have gained and retained leadership position in its industrysimply because of their unique pricing strategy. They devised a unique pricing strategy that set them apart and gave them competitive edge.[ii] †¢ There are several factors that need to be taken under consideration before deciding your product pricing strategy. †¢ Intensity of competition/ type†¦show more content†¦One of the most unavoidable factor is the target group. So the product should be higher priced if the target audience is the rich class and priced low if it is designed for lower class of the society. â€Å"Example of an entrepreneur that adhered to the â€Å"class of targeted customer† factor while devising a product pricing strategy and became extremely successful was Henry Ford, founder of Ford Motor Company. His company’s mission statement was â€Å"Democratize the automobile.† Before the coming of Henry Ford, cars were exclusively for the rich. Another entrepreneur that won at the product price level was Sam Walton, founder of Wal-Mart. His adopted product pricing strategy was summed up in the company’s slogan â€Å"Always low price.â€Å" Veblen goods: the fact that people get satisfaction from being sen by other people to consume expensive products. The higher the price of the good, the greater will be the demand because it is considered as a status symbol(diagram) Level and elasticity of demand: This is probably the first factor that would influence the pricing of a product. The higher the demand as compared to the supply, the higher can the price be. Industries often create artificial shortage to maintain a higher price level. Economic condition like rate of inflation, Recesion(relate it to UK)government policies, taxation rates, etc also have an impact on product pricing. Location. Links:Show MoreRelatedThe Price Of The Product1003 Words   |  5 Pages2. Pricing- The price of the Product is actually the money which a consumer pays in order to enjoy it. Price is a necessary element of the marketing mix because it determines the company’s profits as well as its life cycle. 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