q describe briefly the concept of pricing and the

Question

Q. Describe briefly the concept of pricing and the factors that influence pricing.

Ans.:  Price is all around us. We pay rent for our apartment, tuition for our, railways, education, buses charge, airline you a  fare,  local  bank  charge  interest for  the money a fee to your doctor etc. therefore price is not just a number on a tag or an item.Traditionally, price has been the main determinant of a buyer's option and it is the only element in the marketing mix that produces revenue. Costing acquires its significance on account of yet another factor. It is a highly risky decision area and mistakes in costing seriously affect the firm, its, growth, profits & future.

Factors Influencing Pricing: There are internal along with external factors that affect pricing:-

Internal Factors:

1.   The image sought by the firm throughout pricing             
2.   Marketing and Corporate objectives of the firm.                
3.   Price elasticity of demand of that particular product.
4.   The feature of the product
5.   Use pattern and turnaround rate of the product. charge of manufacturing & marketing.
6.   Various Stage of product in its life cycle.
7.   Other fundamentals of the marketing mix and their interaction with pricing
8.   Extent of differentiation practiced
9.   Composition of the product line of the particular firm.

External Factors:

1.   purchaser behavior in respect of the product
2.   Market characteristics (relative to customer, demand & competition)
3.   Bargaining power of chief suppliers
4.   Bargaining power of chief customers
5.   Government controls and regulation on pricing
6.   Competitor's pricing policy
7.   Societal consideration.
8.   Other relevant legal aspects.