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Explain The 8 Steps Of Pricing Process

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8 steps for Pricing Process:
Some of the major steps involved in price determination process are as follows: (i) Market Segmentation (ii) Estimate Demand (iii) The Market Share (iv) The Marketing Mix (v) Estimate of Costs (vi) Pricing Policies (vii) Pricing Strategies (viii) The Price Structure.
(i) Market Segmentation:
In market segments, marketers will have firm decisions on:
-The type of products to be produced or sold.
-The kind of service to be rendered.
-The costs of operations to be estimated.
-The types of customers or market segments sought.
(ii) Estimate Demand:
Marketers will estimate total demand for the product based on sales forecast, channel opinions and degree of competition in the market. Prices of comparable rival products …show more content…

Proper pricing strategy is evolved to reach the expected market share either through skimming price or through penetration price or through a compromise, i.e., fair trading or fair price- to cover cost of goods, operating expenses and normal profit margin.
(iv) The Marketing Mix:
The overall marketing strategy is based on an integrated approach to all the elements of marketing mix. It covers: (a) Product-market strategy (b) Promotion strategy (c) Pricing Strategy (d) Distribution Strategy.
Marketers will have to assign an appropriate role to price as an element of marketing- mix. Promotional strategy will affect pricing decisions.
The design of marketing mix can indicate the role to be played by pricing in relation to promotion and distribution policies. Price is critical strategic element of the marketing mix as it influences the quality perception and enables product or brand positioning. Price is also a good tactical variable. Changes in price can be made much faster than in any other variable of marketing mix. Hence, price has a good tactical …show more content…

This is usually expressed as a percentage of breakeven. Industry norms, experience or market knowledge will help you decide mark-up. If the price looks too high, trim your costs and reduce the price accordingly. Be aware of the limitations of cost-plus pricing, because it works on the assumption you will sell all units. If you don't, your profit is lower.

5- Set a Value-Based Pricing:
You'll have to know your business sector well to set a quality based cost. For instance, the expense to put up a hairdryer for sale to the public may be £10. Yet you may have the capacity to charge clients £25 if this is the business sector esteem.

6- Think about Other Influences on Price:
In what capacity will charging VAT have an effect on cost? Could you keep edges unassuming on a few items with a specific end goal to attain to higher edge deals on others? You may need to compute diverse costs for distinctive regions, markets or deals you make on the web. Offering at odd qualities (for instance, £9.99) instead of entire pounds is basic.

7- Keep on Your

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