Friday, December 7, 2012

Objectives & Methods Pricing Approach

Definition / Definition of Price (Price)

Price is a very important part in the marketing of a product because the price is one of the four marketing mix / marketing mix (4P = product, price, place, promotion / product, price, distribution, promotion). 

Price is an exchange of goods or services is expressed in monetary units. Price is one determinant of the success of a company because the price determines how much profit to be gained from the company's sale of its products in the form of goods and services.

Set the price too high will cause sales to decline, but if the price is too low will reduce the profitability enterprise organizations ..

 The purpose Pricing

1. Maximum benefit With competitive pricing, the company will gain optimal profit.

2. Maintain company Of the company's profit margin obtained will be used for operational costs of the company.

Example: for salaries / wages of employees, to pay electricity bills, water bills underground, purchase of raw materials, transportation costs, and so forth.

3. Achieving ROI (Return on Investment) The company would want behind the capital investment made in the company so that the exact pricing will accelerate the achievement of capital return / roi.

4. Mastering Market Share By setting a low price compared to competing products, it can distract consumers from the products of competitors on the market.

5. Maintaining the status quo When a company has its own market, adjustments should be made at the right price in order to maintain existing market share.

 How to / Techniques / Methods Product Pricing

1. Supply and Demand Approach (supply-demand approach) From the level of demand and supply that is determined equilibrium price (equilibrium price) in a way that is able to find the price paid by consumers and the price received by producers forming the requested amount equal to the quantity supplied.

2. Cost approach (cost oriented approach) Determine the price by calculating the cost manufacturer with the desired profit level both with markup pricing and break-even analysis.

3. The market approach (market approach) Formulate prices for products marketed by calculating the variables that affect the market and prices as political circumstances, competition, social, cultural, and others.

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