Pricing is one of the significant elements of the marketing mix, if late, it has come to occupy the centre stage in marketing wars. Importance of Pricing – Inflation in the Economy, Mature Products and Markets, Customers Value Perception, Inter-Firm Rivalry and a Few Others However prices should not be fluctuated too frequently to stimulate sales. In case of goods whose demand is price sensitive, even a small reduction in price will lead to higher sales volume. In order to encourage more sales, the marketing manager may reduce the price. Vital Element of Sales Promotion:īeing the most flexible component of marketing mix, price is the most important part of the sales promotion. Therefore price is a critical factor that influences a buyer’s decision. But if he thinks that a product is affordable, then he would try to get more information about it. If a product is priced too high, then the customer may lose interest in knowing more. After learning about the price, the customers try to learn more about the product qualities. While the customer may base his final buying decision on the overall benefits offered by the product, he is likely to compare the price with the perceived value of the product to evaluate it. Often price is the first factor a customer notices about a product. So in order to maintain balance between profitability and volume of sales, it is important to fix the right price. Similarly, a very high price will ensure more profit margins, but lesser sales. Low prices may attract customers in the initial stages, but it would be very hard for the company to raise prices on a future date. It is extremely significant to fix prices at the right level after sufficient market research and evaluation of factors like competitors’ strategies, market conditions, cost of production, etc. The wrong price decision can bring about the downfall of a company. Therefore it is a very important component of marketing mix. But price is very flexible and can be changed according to the needs of the situation. Changes in product design or distribution system would take a long time to be implemented.īringing about changes in advertisements or promotional activities is also a time consuming task. Prices can be changed rapidly, as compared to other elements like product, place or promotion.
Value based pricing in online sales trial#
We offer a risk free trial for 7 days without any commitments.Price is the most adjustable aspect of the marketing mix. If you are looking to start your own online store, think about Storeplum.
All this just by uploading product catalog into the system and Storeplum will do the rest. Storeplum allows you to bundle, place with decoy products and also give you a fair idea of your profits and losses in a form of monthly, quarterly reports. Another way to keep ahead of competition is to deploy some counterintuitive pricing strategies.
Since price is essential to customers’ purchase decisions, and there are various substitutes and alternatives available in the market for consumers, you have to employ intelligent pricing strategies to keep your business profitable. However, consistently re-evaluating the pricing strategy will give you a competitive edge and increase profitability. Various factors like competition, customer expectations, material costs, shipping, etc., should be taken into account when developing a pricing strategy for your e-commerce store.
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