Demand and EasyjetPricing is part of the four main factors considered to shape market mix; the others are place, product and promotion (The Times 100; Learn marketing. Net). In pricing to achieve the appropriate market mix, the right price to sell at should be established. Of the four elements of market mixing, pricing is unique since it is the one that brings in the profits while the others attribute to the cost. However, before setting the price of the product or service, there a number of things one should carefully consider in order to achieve the intended results.
Key among these is the perception and mood of the market towards the product or service (The Times 100). How does the market view the product against other similar products in the market? If the product creates the necessary appeal and confidence in terms of its quality and usage then the pricing should be done to take advantage of this (The Times 100; Learn marketing. Net). However, the price should not be set too high. This can limit the volume of sales since a certain segment of the market may be unwilling to purchase it and opt for a cheaper alternative.
The perception of the consumers should be gauged against their willingness to spend. Another aspect is the season. There are services and products whose demand changes with season. A good example will be warm clothing. When its summer, the demand for warm clothing is usually on the decline, therefore their pricing should be set lower than during the winter season. This will enable the business to still make sales as it waits for the favourable season to reach.
A lower price will attract those consumers who purchase products early in preparation for the coming season. However, the price should not be set too low to after the profitability of the business. The price should be justified against the dynamic forces of the supply and demand affecting the product in question. It is also worth noting that, the final price of the product or service should also cater for the other elements in the marketing mix as well as the cost of production.
In fact the cost elements of these factors form the non negotiable part of the price since they are expenses that have been incurred on behalf of the product or service. However the business should always strive to keep these expenses as low as possible in order to have a wide bargaining margin when setting the final price. Another factor that should be put into account is the level of competition in the market. A product or service can generate consumer appeal but due to tight competition from other products in market it may not rake in the desired sales volumes.
Adjusting the price just a little bit may just do the trick. With so many products in the market the customers may end up confused which product to believe in. this is complicated further by the countless number of promotion campaigns seeking to influence the market in one direction. In such situations a small price adjustment can lure the market towards you product since the consumers are making a judgement based on the price rather than the quality attributes of the product (The Times 100).