PPT - Price Decision B Com Notes | EduRev

Cost Accounting

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B Com : PPT - Price Decision B Com Notes | EduRev

 Page 1


PRICING
?PRICING is the act of determining the exchange value between 
the purchasing power utility or satisfaction acquired by an 
individual, group or an organization through the purchase of 
goods, services, ideas, rights etc.
?It is one of the critical decision making areas in marketing.
? This element of the marketing mix cannot be moved too 
frequently as it is closely associated with quality of product and 
services.
? It  involves many activities performed within an organization to 
determine the exchange value, such as setting the base price, 
determining discounts and commissions, and formulating pricing 
objectives, policies and strategies.
?It is the most secretly performed activity in a business 
organization . 
Page 2


PRICING
?PRICING is the act of determining the exchange value between 
the purchasing power utility or satisfaction acquired by an 
individual, group or an organization through the purchase of 
goods, services, ideas, rights etc.
?It is one of the critical decision making areas in marketing.
? This element of the marketing mix cannot be moved too 
frequently as it is closely associated with quality of product and 
services.
? It  involves many activities performed within an organization to 
determine the exchange value, such as setting the base price, 
determining discounts and commissions, and formulating pricing 
objectives, policies and strategies.
?It is the most secretly performed activity in a business 
organization . 
Continue…
?Method adopted by a firm to set its selling price. It
usually depends on the firm's average costs, and on
the customer's perceived value of the product in
comparison to his or her perceived value of the
competing products. Different pricing methods place
varying degree of emphasis on selection estimation,
and evaluation of costs , comparative analysis, and
market situation.
? Is the process of determining what a company will
receive in exchange for its product or service.
Page 3


PRICING
?PRICING is the act of determining the exchange value between 
the purchasing power utility or satisfaction acquired by an 
individual, group or an organization through the purchase of 
goods, services, ideas, rights etc.
?It is one of the critical decision making areas in marketing.
? This element of the marketing mix cannot be moved too 
frequently as it is closely associated with quality of product and 
services.
? It  involves many activities performed within an organization to 
determine the exchange value, such as setting the base price, 
determining discounts and commissions, and formulating pricing 
objectives, policies and strategies.
?It is the most secretly performed activity in a business 
organization . 
Continue…
?Method adopted by a firm to set its selling price. It
usually depends on the firm's average costs, and on
the customer's perceived value of the product in
comparison to his or her perceived value of the
competing products. Different pricing methods place
varying degree of emphasis on selection estimation,
and evaluation of costs , comparative analysis, and
market situation.
? Is the process of determining what a company will
receive in exchange for its product or service.
? Pricing factors are manufacturing cost, market place,
competition, market condition, brand, and quality of
product.
? Pricing is also a key variable in price allocation theory.
Pricing is a fundamental aspect of financial modeling and
is one of the four Ps of the marketing mix. (The other
three aspects are product, promotion, and place.)
? Price is the only revenue generating element amongst
the four Ps, the rest being cost centers. However, the
other Ps of marketing will contribute to decreasing price
elasticity and so enable price increases to drive greater
revenue and profits.
Page 4


PRICING
?PRICING is the act of determining the exchange value between 
the purchasing power utility or satisfaction acquired by an 
individual, group or an organization through the purchase of 
goods, services, ideas, rights etc.
?It is one of the critical decision making areas in marketing.
? This element of the marketing mix cannot be moved too 
frequently as it is closely associated with quality of product and 
services.
? It  involves many activities performed within an organization to 
determine the exchange value, such as setting the base price, 
determining discounts and commissions, and formulating pricing 
objectives, policies and strategies.
?It is the most secretly performed activity in a business 
organization . 
Continue…
?Method adopted by a firm to set its selling price. It
usually depends on the firm's average costs, and on
the customer's perceived value of the product in
comparison to his or her perceived value of the
competing products. Different pricing methods place
varying degree of emphasis on selection estimation,
and evaluation of costs , comparative analysis, and
market situation.
? Is the process of determining what a company will
receive in exchange for its product or service.
? Pricing factors are manufacturing cost, market place,
competition, market condition, brand, and quality of
product.
? Pricing is also a key variable in price allocation theory.
Pricing is a fundamental aspect of financial modeling and
is one of the four Ps of the marketing mix. (The other
three aspects are product, promotion, and place.)
? Price is the only revenue generating element amongst
the four Ps, the rest being cost centers. However, the
other Ps of marketing will contribute to decreasing price
elasticity and so enable price increases to drive greater
revenue and profits.
PRICE
• The price we set for our offering plays a large role
in its marketability. Pricing for offerings that are
more commonly available in the market is more
elastic, meaning that unit sales will go up or down
more responsively in response to price changes. By
contrast, those products that have a generally more
limited availability in the market (but with strong
demand) are more inelastic, meaning that price
changes will not affect unit sales very much. The
price elasticity of your offering can be determined
through various market testing techniques.
• Price is the value placed on what is exchanged. It is
usually expressed in terms of monetary units.
Page 5


PRICING
?PRICING is the act of determining the exchange value between 
the purchasing power utility or satisfaction acquired by an 
individual, group or an organization through the purchase of 
goods, services, ideas, rights etc.
?It is one of the critical decision making areas in marketing.
? This element of the marketing mix cannot be moved too 
frequently as it is closely associated with quality of product and 
services.
? It  involves many activities performed within an organization to 
determine the exchange value, such as setting the base price, 
determining discounts and commissions, and formulating pricing 
objectives, policies and strategies.
?It is the most secretly performed activity in a business 
organization . 
Continue…
?Method adopted by a firm to set its selling price. It
usually depends on the firm's average costs, and on
the customer's perceived value of the product in
comparison to his or her perceived value of the
competing products. Different pricing methods place
varying degree of emphasis on selection estimation,
and evaluation of costs , comparative analysis, and
market situation.
? Is the process of determining what a company will
receive in exchange for its product or service.
? Pricing factors are manufacturing cost, market place,
competition, market condition, brand, and quality of
product.
? Pricing is also a key variable in price allocation theory.
Pricing is a fundamental aspect of financial modeling and
is one of the four Ps of the marketing mix. (The other
three aspects are product, promotion, and place.)
? Price is the only revenue generating element amongst
the four Ps, the rest being cost centers. However, the
other Ps of marketing will contribute to decreasing price
elasticity and so enable price increases to drive greater
revenue and profits.
PRICE
• The price we set for our offering plays a large role
in its marketability. Pricing for offerings that are
more commonly available in the market is more
elastic, meaning that unit sales will go up or down
more responsively in response to price changes. By
contrast, those products that have a generally more
limited availability in the market (but with strong
demand) are more inelastic, meaning that price
changes will not affect unit sales very much. The
price elasticity of your offering can be determined
through various market testing techniques.
• Price is the value placed on what is exchanged. It is
usually expressed in terms of monetary units.
What a price should do???????
A well chosen price should do three things:
? achieve the financial goals of the company (i.e. profitability)
? fit the realities of the marketplace (will customers buy at 
that price?)
? support a product's market positioning and be consistent 
with the other variables in the marketing mix
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