What are the factors that influence your product pricing strategy and marketing especially if the goal of your marketing plan is to increase market share and . or business plan always includes an opposition or competition analysis section. The price of the product may also be determined on the basis of the image of the firm the customers, and during the growth stage, a firm may increase the price. The consumer factors that must be considered includes the price sensitivity of. Jul 23, Understanding how external factors can influence how you price yourself is Price sensitivity can change over time based on a number of factors including For example, lowering the price of a product can increase demand.
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This information can be useful in helping you determine your price point. When you compare your business to competitors, it's also important to ensure you look at the business as a whole and compare on other value-based traits such as special features, quality and customer service as well as price. Calculate the price of your products or services when starting a business and developing your marketing plan.
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Marketing can help you reach your target audience, boost your customer base, and ultimately increase your bottom line. Analyse pricing influences Last Updated: Thanks for your feedback. If you have any ideas on how we can improve, we'd love to hear them.
Please provide your comments in the feedback form. Feedback News Subscribe Share. Pricing Calculate the price of your products or services when starting a business and developing your marketing plan. These seasonal considerations can easily be factored into marketing strategy in order to ensure a company is providing its customers with in-demand products at the appropriate times of the year. When it comes to non-price factors affecting demand, population is a large consideration.
Population does not simply mean the number of people living in a certain area, though. Population, from a marketing standpoint, indicates the number of buyers in any given market.
When the number of buyers in a market increases, there is a subsequent increase in the demand for products, goods and services. Likewise, when the number of buyers in a market decreases, the demand for the aforementioned products, goods and services also decreases.
When more buyers enter the market, the amount of product consumed on the large scale experiences a drastic uptick. The amount of consumers in the market can vary based upon a university being in session or not, a housing boom, the creation of new jobs in particular area and any number of other factors. Non-price factors have the potential to greatly influence the success of an item on the market at any given time. Because of this, it is wise for marketers to pay attention to non-price factors that affect demand as they prepare to put together a marketing and promotions plan.
While non-price factors can vary greatly, they are an important consideration in any marketing strategy. To learn more about marketing or promotions, visit Mpell Promotions today. Your email address will not be published. For instance, in India the demand for many essential goods, especially food grains, has increased because of the increase in the population of the country and the resultant increase in the number of consumers for them.
If due to some reason, consumers expect that in the near future prices of the goods would rise, then in the present they would demand greater quantities of the goods so that in the future they should not have to pay higher prices.
Similarly, when the consumers expect that in the future the prices of goods will fall, then in the present they will postpone a part of the consumption of goods with the result that their present demand for goods will decrease. When demand changes due to the factors other than price, there is a shift in the whole demand curve. As mentioned above, apart from price, demand for a commodity is determined by incomes of the consumers, his tastes and preferences, prices of related goods.
Thus, when there is any change in these factors, it will cause a shift in demand curve. For example, if incomes of the consumers increase, say due to the hike in their wages and salaries or due to the grant of dearness allowance, they will demand more of a good, say cloth, at each price.
This will cause a shift in the demand curve to the right. Similarly, if preferences of the people for a commodity, say colour TV, become greater, their demand for colour TV will increase, that is, the demand curve will shift to the right and, therefore, at each price they will demand more colour TV. The other important factor which can cause an increase in demand for a commodity is the expectations about future prices. If people expect that price of a commodity is likely to go up in future, they will try to purchase the commodity, especially a durable one, in the current period which will boost the current demand for the goods and cause a shift in the demand curve to the right.
As seen above, the prices of related commodities such as substitutes and complements can also change the demand for a commodity. For example, if the price of coffee rises other factors remaining the constant, this will cause the demand for tea, a substitute for coffee, to increase and its demand curve to shift to the right. If there are adverse changes in the factors influencing demand, it will lead to the decrease in demand causing a shift in the demand curve.
For example, if due to inadequate rainfall agricultural production in a year declines this will cause a fall in the incomes of the farmers. This fall incomes of the farmers will cause a decrease in the demand for industrial products, say cloth, and will result in a shift in the demand curve to the left. Similarly, change in preferences for commodities can also affect the demand. But this brought about decrease in demand for black and white TVs causing leftward shift in demand curve for these black and white TVs.
The decrease in demand does not occur due to the rise in price but due to the changes in other determinants of demand.
Decrease in demand for a commodity may occur due to the fall in the prices of its substitutes, rise in the prices of complements of that commodity and if the people expect that price of a good will fall in future.
Factors Influencing Pricing Decisions
Price isn't the only factor that affects quantity demanded. If you need a new car, the price of a Honda may affect your demand for a Ford. A product whose demand rises when income rises, and vice versa, is called a normal good. Other things that change demand include tastes and preferences, the composition or size. Nov 22, Five factors to consider when pricing products or services These include your fixed costs (the expenses that will come in every month. It may be noted that when there is a change in these non-price factors, the whole curve prove successful they cause an increase in the demand for the product.