What Points To Consider Before Setting Your Retail Price
Things which impact the success of a specific business include the price of a product and it may be one of the difficult tasks to achieve for many businesses. There are a variety of factors that should be considered before one sets a retail price. Some of them have been discussed below
Ones which have a great impact on the pricing of a product are the competitors. Specific market shares of a number of competitors can influence that whether some sort of business is capable of setting price independently or it depends upon its competitors lead.
A business is unable to ignore its production cost or buying of a specific product when a business has to set a specific selling price. There are chances that a specific business can fail if it is selling less than cost. Another way by which a business can fail is when its fixed costs are not covering.
Most of the time what happens is that a variety of people prefer buying a specific product. The product may be useful for a number of people and they might need more of it. But due to a shortage of a product people might not be able to buy it more. So, in this case, the supply of that specific product should be increased to a number of people can use it effectively.
There are a number of times when there is a downturn in a certain economy. Sometimes an economy may be functioning properly and sometimes the condition of an economy may not be good. What happens is that when the prices of a product are high and the economy is not functioning properly then people may not prefer to buy a specific product. In this case what a number of sellers should do is to reduce the price of a specific product. By doing so, people may buy more of that product and more of that product would be sold out.
In this case, it is seen that who the specific buyers of an available product are. Whether the interested buyers can buy the available product at a price which has been set by a seller. A consumer might have some sort of bargaining power for a specific product which has been made available in the market.
The positioning of a Product
The prices which have been set for a product are mostly influenced by a number of ways by which different consumers view a specific company and the quality of the specific products. When the specific price of a product is low as set by the company then consumers have a thing in their mind that cheap products are being sold out because the company might be a discount retailer. The products which are not so expensive i.e. are of low quality may be cheap. A number of products are sold out at high price and companies selling these products may also name themselves as luxury brands. Before managers of a specific company set a price of their product they must keep the image of their company in their mind. The price of a product must not be so high because if the company isn’t able to deliver the product as promised to the consumers then the image of a company may suffer a lot. Like this people may not prefer buying a number of products from the same company which they used to buy before.
These are a number of points that should be kept in mind before one opts for setting a price of a specific product.