Explain the external factors of pricing decisions, Managerial Accounting

Assignment Help:

Explain the External factors of pricing decisions

1) Demand: the market demand for a product or service obviously has big impact on pricing. Since demand is affected by factors like number and size of competitor by factor like number and size of competitors the prospective buyers their capacity and willingness to pay their preference etc. are taken into account while fixing the price.

2) Competition: competitive conditions effect the pricing decisions. Competition is a crucial factor in price determination. A firm can fix the price equal to or lower than of the competitors provided the quality of product in no case be lower than that of the competitors.

3) Buyers: the various consumers and business that buy a company's product or service may have an influence in the pricing decision. Their nature and behaviour for the purchase of a particular product brand or service etc. affect pricing when their number is large.

4) Government: price discretion is also affected by the price-control by the government through enactment of legislation when it is thought proper to arrest the inflationary trend in price of certain products. The price cannot be fixed higher as government keeps a close watch on pricing in the private sector.

 


Related Discussions:- Explain the external factors of pricing decisions

Example of credit standards, The current sales of M/s ABC are Rs.100 lakhs....

The current sales of M/s ABC are Rs.100 lakhs. Through relaxing the credit standards the firm can produce additional sales of Rs.15 lakhs on that bad debt losses would be 10 percen

Working capital, State Factors determining Working Capital requirement.

State Factors determining Working Capital requirement.

What is zero bases budgeting, What is Zero bases budgeting (ZBB) ...

What is Zero bases budgeting (ZBB) Meaning and definition Zero base budgeting is a management tool for providing a sys tem for a careful consideration of actual in

Inventory control, INVENTORY CONTROL The activities of a business durin...

INVENTORY CONTROL The activities of a business during a financial year combine investment projects in progress with new projects commencing and others terminate within the year

Facets of cash management, Cash management is related along with the manage...

Cash management is related along with the management of: Cash outflows and inflows of the firm Cash flows inside the firm Cash balances as financing deficit and inve

Definition of accounting, Definition of accounting Accounting is the pr...

Definition of accounting Accounting is the procedure of recognizing measuring and communicating economic information to allow informed judgments and decisions by the user’s inf

The least-cost method, The least-cost method The process is described a...

The least-cost method The process is described as follows: Assign as much as possible to the variable with the least unit cost in the whole tableau. (Ties are broken randomly).

What is the flexible budgets, What is the Flexible budgets  A flexible ...

What is the Flexible budgets  A flexible budget consists of a series of budgets for different level of activity. It therefore varies with the level of activity attained. A flex

Determine abc system and service organizations, ABC System and service orga...

ABC System and service organizations The ABC system has been taken up as applied to a manufacturing organizations with the same efficiency. One basic characteristic of service

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd