Price Mix

PRICE mix

Price is the monetary sacrifice of a product. Price mix refers to the decisions relating to the price charged for the product.

Determination of the Price of a Product is influenced by many factors.

1. Pricing Objectives:

• Competitive Market: to survive at competitive market prices has to keep low
• Attaining Product Quality Leadership: normally higher prices are charged to cover high quality and high cost of Research and Development.
• Obtaining Market Share Leadership: If a firm's objective is to obtain a larger share of the market; it will keep the price of its products at a lower

2. The extent of  Competition: Apart from these internal considerations, external factors such as prices of similar products in the market, govt.-policy, etc. should also be considered
3. Total Cost of production: Sales price = total costs + desired profit. No firm likes to sell its product below the total cost of the product.
4. Demand for the product: If there is less demand for the product, it will not sell at a very high price. Demand should be predicted correctly before setting the price.
5. Other marketing methods Used: The price fixation process is also affected by other elements of marketing such as distribution system, quality of salesmen employed, quality and amount of advertising, sales promotion efforts, the type of packaging, credit facility, and customer services provided.
6. Government and Legal Regulations: to protect the interest of the public against unfair practices Government can declare certain products as essential products and regulate their price.(petrol, diesel, LPG)