Understanding Selling Price: Key Factors and Pricing Objectives for Businesses
Selling price is the amount a seller charges for goods or services, determined through a structured process. It plays a vital role in business operations by influencing income from sales and helping achieve company goals. For customers, it aids in product comparison and allocation of funds. Pricing objectives can be sales-oriented, focused on income generation and competitiveness, or profit-oriented, aimed at maximizing profits and ROI. Various factors affect selling price, including costs, demand, competition, economic conditions, and regulatory factors.
Understanding Selling Price: Key Factors and Pricing Objectives for Businesses
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Presentation Transcript
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
Importance • For Business • Determine income from sales • Reach company goals • For Customers • Product comparison • Money allocation decisions
Pricing Objectives • Should be compatible with marketing objectives. • May change over time
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
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
Factors Affecting Selling Price • Costs • Fixed • Variable • Supply and Demand • Economic Conditions • Competition • Pure Competition • Monopolistic Competition • Oligopoly • Monopoly
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
