PRICING DECISION

PRICING POLICY, PRICING OBJECTIVES AND PRICING STRATEGIES

Alright Jonathan, nice to meet you again. Jonathan replied…” Wow Andu, as good as me because I understand that we will have a good time to carry on with our discussion we postponed the other day”.

Yeah Jonathan. Now before we continue it is good to remind each other what we discussed the other day. Yeah, you will remember that we discussed about Evaluation of the factors which influence the pricing of a product or service of a business firm. We said that there are factors which influence pricing decisions as listed below.

1. The objectives and strategies of the firm

2. The market condition in which the firm operates

3. The customers of the firm

4. The cost of the product or service the firm offers

5. The demand for the firm’s product

6. The elasticity of demand for the product

7. The stages of the product life cycle

8. The level of capacity utilization by the firm

9. Government control on price setting

10. Distinctive features of the product

11. Domination of the market by the firm

Well Jonathan, I understand that you remember these factors. I hope you also remember that to arrive at pricing decision the business firm does not necessarily have to use all these factors together at a time. A…