Meaning of Pricing, Forms of Price, Objectives of Pricing, Importance of Pricing. Pricing Allowances and Discounts, Types of Costs. Factor affecting Pricing
Pricing means the process of selecting the pricing objectives, determining the possible range of prices, developing price strategies, setting the final price, and implementing and controlling pricing decision. The determination of price is a very important and crucial decision. It affects all parties involved in the production, distribution, and consumption of goods. Price affects the volume of production and the amount of profit. It is a source of income to distributors.The pricing objectives reflect overall goal of the organization.There are several objectives of the pricing and they are mentioned below : -Sales oriented objectives -Status oriented objectives and the various importances of the pricing are : -Profit Margin -Sales Volume -Position -Market share
Discount is the price differential that quotes the price so that the buyer pays much less than the quoted price. Discount is an allowance made to the buyers in consideration on marketing services rendered. Discount can be classified into the following four types namely, trade, quantity, cash and seasonal.The discount can be of various types and they are -Trade discount -Quantity discount -cash discount -Seasonal Discount And regarding the factors that affect pricing, there are both internal and the external factors .The internal factors include organizational factors ,product differentiation,objectives of the firm ,cost of product, business efficiency and the external factors includes product demand ,competition,behavior and nature of buyers ,suppliers ,stage of economy .