elling Price
Determining the correct price
And Selling Price is?
• Selling Price- The amount a
seller charges for a good or
service
• All businesses follow a process
to determine prices
• Selling prices are dynamic
2
Components of Selling Price
From selling price, the business must cover:
Profit
Costs of
the
product
Operating
expences
3
Importance
• For Business
– Determine income from sales
– Reach company goals
• For Customers
– Product comparison
– Money allocation decisions
4
Pricing Objectives
• Should be compatible
with marketing
objectives.
• May change over time
5
Pricing Objectives-Sales
Oriented
• What is the purpose?
– To increase the total amount of income
from sales
• Objectives:
– Creating an image
– Be more competitive
– Obtaining, maintaining, or increasing market
share
6
Pricing Objectives- Profit
Oriented
• What is the purpose?
– To create profits for the business
• Objectives
– Surviving
– Maximizing Profits
– Earning return on investment
– Earning return on sales
7
Factors Affecting Selling Price
• Costs
– Fixed
– Variable
• Supply and Demand
• Economic Conditions
• Competition
– Pure Competition
– Monopolistic Competition
– Oligopoly
– Monopoly
8
Factors Affecting Selling
Price(cont.)
• Government Regulation
–
–
–
–
Price fixing
Price discrimination
Price advertising
Unit pricing
• Distribution Channels
• Company Objectives and Strategies
– Product mix
– Product life cycle
– Target market
9