Learn how to prepare a Marketing Plan for a company (with example)

Marketing Management Course
AllAssignmentHelp Academy
  • 20 lessons
  • 5 quizzes
  • 5 week duration

3.2 Price

AllAssignmentHelp Academy

Price is another important thing that a customer looks into a product. If your product price is higher than your competitors, then it should have some justifications.

Customers would want to know why your product’s price is higher. If you do not have any answer, chances are high your competitors will have your customers.

Pricing for any product is done is based on two things. First is the cost you have incurred in manufacturing the product, and the cost your customers are willing to pay. The second aspect is more important in pricing.

If your customer is expecting your product to be of $10, and your total cost is $11, you should never manufacture it. You will be in loss.

On the other hand, if you are a luxury brand and known among people, then you are lucky on the pricing. Generally people expects luxury products to be costlier.

So even if you have incurred only $11 total cost in manufacturing an item, you can sell it for $100. This is the power of customer expectation.

If you want to sell your $11 product to the customers who want it at $10, you have to change their expectation. This is the job of promotion and advertisement.