Finding the Right Price for a Product
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All right. So as marketers we help design
our products and then we
decide how to promote them and and where
make them available to customers and
then we have to decide one more thing
what should be our price in other words
what is the right price for our product?
Well that depends on a number of things
first and foremost it depends on our
Clearly if we want to make money we need
to set our price higher
than whatever it cost us to produce the
That sounds obvious but there are many
businesses might somehow overlook some
of their production costs
and set their price too low, so we have
to be very careful about
considering our production costs. Another
consideration when setting our price
is our strategy what are we trying to
achieve or what do we want people to
think about our product
and what's our main goal. There are
different things that we could target
whether it's market share or profit
those are the two main ones
but whichever one we are more concerned
indicate or dictate what price is right.
Next we have to consider delivery costs
for some products
transportation or delivery costs are
for other products they're quite high.
Think about the difference between
distributing packs of gum versus
there's a big cost difference involved
So depending on our product delivery costs
may be a major concern.
Next depending on where we sell our
product we may have to consider
taxes and tariffs this also depends on
what type of product we have.
Certain products are subject to taxes
and domestic markets
other times when we sell internationally
we have to consider the tariffs or taxes
those other countries put on our product.
All of these have to be figured into
determining the right price. Lastly there
are legal issues that we have to
because there are sometimes rules about
how we set our price,
if our product is regulated or if uh
well in general there are laws about how
we can determine our price
and we have to make sure we pay
attention to those. So when we
think about all of these things together
hopefully we can determine
what is the right price.