Marketing

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• Summary

Price is the worth of a product or service in monetary terms. This money represents the sum of values that consumers exchange for the benefits of having or using the product of service.

Factors considered before fixing price are:

1. Cost of product: It includes the total cost of producing, distributing and selling the product like- Fixed Cost, variable costs, semi-variable cost.
2. Competition in the market: Competitors prices and their anticipated reaction must be considered before fixing the price of a product.
3. Utility and Demand of the product: The maximum price a buyer is willing to pay is the value of the utility of the product and minimum price a seller is willing to offer is the cost of the product.
4. Pricing Objectives: (a) Price Maximization, (b) Obtaining market shares, (c) Surviving in a competitive market etc.