You know, we should be engaged with using prices in the firms in competitive ways, and in ways to acquire customers and more buying and selling than whatever. It is sensible to be aware of the prices, and we should use all the energy as we want to create good brand images of the products in relation to how high the prices are. And the prices in the markets are important for many people, and the lower the prices, the less income you are using, and the more you can buy of the number of products that are available, and that people like and appreciate.
Prices are important for many people and many firms, and they can go up or down, or they can be constant, and that is the ways that prices have been in every history and every story in business life anywhere in the world. And prices are using to create attraction and wants of buying many places, and we are just in position of using prices to get people and firms to buy products. And the products can be with or without brands.
So, which pricing strategies can firms use against their target markets from time to time, and from place to place? There are mainly five pricing strategies, and these are: (1) Cost-plus pricing. Calculate your costs and add a mark-up. (2) Competitive pricing. Set a price based on what the competition charges. (3) Price skimming. Set a high price and lower it as the market evolves.
(4) Penetration pricing. Set a low price to enter a competitive market and raise it later. And last but not least: (5) Value-based pricing. Base your product or service’s price on what the customer believes it’s worth.
So, any serious business school at ever place, should have competence and strategies of how to use prices in the markets, and that we can use prices both in internal and external markets. And we know for the literature in economics and in business administration, that there in the beginning were markets. So, we cannot plan the future and doing enough things for the future when not thinking about market philosophy and market information.
Price is dependent on the interaction between demand and supply components of a market. Demand and supply represent the willingness of consumers and producers to engage in buying and selling. An exchange of a product takes place when buyers and sellers can agree upon a price. And you know, Varian from MIT, is writing much about what demand and supply can be in many markets, and which variants we are meeting in the markets, and we should supply the markets with the products that the firms and the people want.
The lower the prices are, the more you can buy of products for a fixed amount of money. And the lower the prices are, the more you can save of money, and these money can be put into the account in the bank, or you can use the available money to buy some other products. So, there is no doubt that the prices are important in the firms and in the markets, and the buyers define themselves whether they want to buy or to ignore buying, so we are finding the potential of buying in relation to how much money firms and people have. And any national economy cannot be in development and movement unless there are individuals and groups wanting to buy products, and therefore it is important that the prices are not too high, in such cases that people have enough money to afford to buy the products that they want, and the products they want, but that they not are always available for buying.
Pricing is managers’ biggest marketing headache. It’s where they feel the most pressure to perform and the least certain that they are doing a good job. The pressure is intensified because, for the most part, managers believe that they don’t have control over price: It is dictated by the market. But perception of prices are important in the markets, and there can be and/or there cannot be relations between prices and quality in the markets where we are.
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Sverre Larsen
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