BY: Rishabhraj singh Thakur
In today’s competitive market, where organisations are strive to attract the customers, has
understood the importance of various marketing forces and one of the important factor is
, because price not only deals with the revenue generation, but play an importantrole right from the targeting and segmenting the customers to the positioning of the product.A firm with a single or multiple product must have the different pricing strategies dependsupon their pricing objectives and market condition in which they are operating. There couldbe many pricing objectives for a firm, some of them are as follows:-
Survival in a Particular Market
: The most common objective of any firm is tosurvive in the market between the cut throat competition. Apart from monopolisticmarket it is difficult to sustain the customers, where they have choices among thecompetitors.
: It is necessary for a firm to generate profit, if they want to do business for along term, company may bear losses or operate without profit for some time, whichcan be recover subsequently, but not for a longer period of time otherwise companywould be sick. Normally such situation occurs during an initial period of the newproduct development.
: Positioning means the image of the product/service into the customersmind. Due to the unequal distribution of wealth among the people in almost every partof the world, price plays the important role of positioning the product, may be in Indiaa luxury mercedese car does not meant for the rich people only, but they have abilityto pay therefore mercedese positioned as the car for rich people.
Return on the Investments
: After the investment into the new product, one of thebiggest concern for a firm is to achieve Break Even Point, because this minimize thefurther risk and make the investors feel secure. Normally rate of returns depends uponthe industry and number of competitors into the industry, for ex: telecom industryhave low rate of returns, due to the low price rate and intense competition.
: It means a part of
sales in total industry sales. To capture themaximum market share, price is an important determinant to keep a firm a head of itscompetitors because lower the price, higher the sales volume and thus, increase inmarket share.
Segmentation of Market
: Perhaps it is difficult to target all income group of customer with the same product and price; therefore to segment the market companyneeds to provides different brands with different price under its product line withsame utility. Mostly in FMCG goods, quantity decides the price of the product andthus the segment of the market.
: Apart from generating profit and other marketing objectives,some firms feels their responsibility towards the society especially towards theunderprivileged and low income group people, this has been noticed that companiesinto the Life Saving Drugs try to maintain their prices to make it affordable for all.