"The amount of money charged for a product or service, or the total of the values that consumers exchange for the benefits of having or by using the service or product".
Price goes by various names in our economy. Price is the amount of money charged for a product or service in the narrowest sense. However, this meaning has been broadened. Currently, in spite of the increased role of non-price factors in the current marketing procedure, price remains significant element in the marketing mix.
Various external and internal factors affect the company's rating decision. Internal factors involve the firm's marketing objectives, costs, marketing mix strategy and organizational factors. External factors that affect pricing decisions include the demand and nature of market, competition, and other environmental factors as the economy, reseller required, and government actions. In the last, the consumer chooses whether the company has set the accurate price. The consumer weighs the cost against the perceived value of utilizing the product. If the cost exceeds the total of the value, consumers will not purchase the product. Consumers vary in the values they assign to different type of product features and marketers frequently vary their pricing plan for different price segments.
Because rating is a dynamic procedure, companies have to design a pricing structure that covers all their products and a variety of continually changing conditions (for example changes that take place as the product progresses via the stages of the product life cycle).
The marketer desiring to explore pricing strategy choice will discover a wealth of alternatives from which to select. The first major choice will be pricing with respect to the product mix. Many forms of product-mix pricing strategies are verified within the context of the competitive environment. For examples, optional-product pricing, product-line pricing by-product pricing, captive-product pricing, and product-bundle pricing. The average marketer does not utilize all of these methods; on the other hand, by studying the options available, the marketer improves his or her ability to be creative with respect to pricing within the context of the product mix.
However, sometimes the firm has to make adjustments in their pricing procedure and strategy. These all adjustments are made to account for variances in changing situations and consumer segments. Adjustments can take place through discounts and allowances or by the wish to segment markets by price. In addition, price contain a psychological aspect that permit for adjustments only as promotional, geographical and international relationships may alter pricing methods and strategies.