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Questions and Answers
What is the importance of labelling in selling a product?
What is the importance of labelling in selling a product?
Labelling helps in selling the product, grading products, and providing required information by law.
Explain the process of pricing and its objective related to survival.
Explain the process of pricing and its objective related to survival.
Pricing is the process of fixing the value in exchange for services and goods. The objective related to survival is to set a reasonable price for consumers and the producer to survive in the market.
What is the objective of pricing related to expansion of current profits?
What is the objective of pricing related to expansion of current profits?
The objective is to enlarge profit margins by evaluating demand and supply in the market.
How can pricing help in ruling the market?
How can pricing help in ruling the market?
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Explain the concept of Market-Oriented Pricing Method.
Explain the concept of Market-Oriented Pricing Method.
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What internal factors influence pricing decisions?
What internal factors influence pricing decisions?
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How do external factors impact pricing strategies?
How do external factors impact pricing strategies?
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What is the objective of Target-Returning Pricing?
What is the objective of Target-Returning Pricing?
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Explain the concept of Value Pricing.
Explain the concept of Value Pricing.
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How does a company move from the survival phase to striving for extra profits?
How does a company move from the survival phase to striving for extra profits?
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Study Notes
Types of Pricing Methods
- Cost-Oriented Pricing Method: Evaluates the price of finished goods based on production costs.
- Cost-Plus Pricing: Calculates the cost of production and adds a fixed percentage (mark-up) to obtain the selling price.
- Markup Pricing: Adds a fixed number or percentage of the total cost to the product's end price to get the selling price.
- Target-Returning Pricing: Fixes the cost to achieve a desired Rate of Return on Investment.
Market-Oriented Pricing Method
- Perceived-Value Pricing: Sets the price based on customer perception of the product's value, considering factors like quality, advertisement, and distribution.
- Value Pricing: Offers high-quality products at low prices.
- Going-Rate Pricing: Sets the price based on competitors' rates.
- Auction Type Pricing: Uses online platforms to buy and sell products, with prices determined by auctions.
- Differential Pricing: Charges different prices for different groups or customers, based on factors like region, product, or time.
Factors Influencing Pricing
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Internal Factors
- Organizational Factors: Top-level managers decide the price range, while lower-level staff fix the distinct price.
- Marketing Mix: Ensures the marketing mix is in sync to attract customers to the price.
- Product Differentiation: Highlights unique features, quality, size, color, packaging, and utility to justify higher prices.
Note: I've omitted some details and rephrased sentences to create concise and independent bullet points, while maintaining the key facts and context.
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Description
Learn about different types of pricing methods used by companies, including Cost Oriented Pricing Method. Explore Cost-Plus Pricing and Markup Pricing under this method, which help in evaluating the price of finished goods.
