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Suppose you have registered a new company & now your company is going to introduce its first product in the market, Product has been developed after having all product related decisions the only pending decision is “fixing introductory product price”. While keeping in view your current company’s scenario, advice what type of pricing you will use at this introductory stage of your new product?
koi tao idea plz im confuse
When it comes to the pricing of your product, there are certain factors you must take into consideration. I will be using this article as a medium to reveal to you 7 critical factors that can influence the pricing of your product.

Below are the 7 critical factors that can influence the pricing of your product:

1) The level Of Competition:

Most entrepreneurs fancy the concept of selling their products with a very high margin. This idea might never be a reality due to competition.

When trying to determine the right price for your product, the issue of competition is a factor that must be trashed out effectively. The more intense the competition in your industry is, the more intense your pricing policy and strategy will have to be.

What i am trying to stress here is this; if your competitor is offering the same product with yours but with a lower price, it may affect your business negatively. That is why in a feasibility study or business plan, competitor or opposition analysis is always included.

2) Perceived value of your product:

This is another factor you take into consideration. Your first step is to ask this question “what is the perceived value of my product in the heart of the customer? You must strive to find a good and definite answer to this question before fixing a price for your product.
The reason perceived value is a critical factor is because
customers often associate low price with low quality. Meaning,
if your product is priced too low, the customers tend to feel
the materials used in producing the goods is cheap and so
therefore, the product is of low quality.
So before fixing a price for your product, make sure you strike
a balance between the price of your product and its perceived
3) Product development cost:

This is definitely a factor you cannot run away from. Normally,
you can never price your product below its actual cost price,
which is determined by the total cost of production and the
tax per unit of your product.
If you are a business owner, you should know that newly
introduced products usually have a high price. This high
introductory price is based on two reasons:
The first reason for the high price is due to lack of
competition, since the product is the first of its kind in the
market place.
The second reason is this; a high price will enable the
manufacturer recover the heavy investments channeled into
the research and development of the product.
4) Economic trend:

This is another unavoidable factor that can influence the
pricing of your product. I don’t even need to stress much on
this. As an entrepreneur, you should know that economic
trends such as taxation rate, labour cost, inflation rate,
currency exchange rate, government’s fiscal and monetary
policy will definitely affect the pricing of your product.
5) Level of market demand:

This is yet another factor you must consider. I feel it is self
explanatory. In business economics, if demand exceeds supply,
there tends to be a mad rush for the few available products,
thus inflating the price of the product and vice versa.
6) Demographics:
he demographics of the targeted customers will indisputably
influence the pricing of your product. Demographic factors
The age bracket of the customers you are targeting
Their location
Educational status
To cut it short, demographics is all about who your targeted
customer is.
Let me share an illustration with you. Assuming your product is
a portable bag specifically designed for students. If the region
you are targeting has a population of maybe 100,000 out of
which 90% of them are students. The result is that your
product price will be affected positively. But if the case is
reversed, something like a population with 10% students. You
know what to expect.
7) Class of targeted customers:

The class of customers you are targeting will greatly influence
the pricing of your product. In the society, there three class of
people. The rich, the middle class and the poor or more
preferably “low income earners,” who are always the majority
in terms of population.
A product targeted at the rich will surely command a high
price. If not, it will be tagged valueless by the rich.
Example of an entrepreneur that successfully applied the
“class of targeted customer” factor and became extremely
successful and rich was Henry Ford, founder of Ford Motor
Company, whose mission statement was “Democratize the
automobile.” Before the coming of Henry Ford, cars were
exclusively for the rich.
Another example of such is Sam Walton, founder of Wal Mart,
whose tagline is “Always low price.”
In conclusion, i will advice you take these factors into
consideration before fixing a price for your product.

I believe you have learnt something from this article.
as.salam-o-alikum aap ki statistics sta301 hai kya plz tell me.


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