Factors affecting the price decision
All these factors are taken into consideration in determining the price of a good or service, having a role in the development planning stages pricing strategy. It is necessary, however, to discuss certain influences that can not be located precisely in a specific stage of the process of developing the strategy.
Cost is one of the main factors in pricing, preferred basis even expected demand. The different pricing costs taken into account, as follows:
- Research and development costs are substantial-car industry, creating a prototype is valued at over one million dollars;
- The cost of wages-are quite important, but not so mean weight Hotori that influence the price of a car;
- The cost of distribution-distribution of cars is quite expensive because it requires specific storage spaces and exposure (show-rooms) and labor in the field.
Demand: the quantity of a good that consumers are willing to buy at a certain time, depending on its price. The price of a product will be higher, the consumers will be less willing to buy it; The price will be lower, the greater will be the quantity demanded of that product.
A first conclusion is that lower prices bring new buyers. On the other hand most vendors (bidders) are aware that, at some point, boosting sales can be achieved only at the expense of price reductions. Discounts each (each new price) will meet on the market, a different quantity of goods sold.
So as a general rule, the quantity demanded in the market (ie the amount that consumers would be willing to purchase) increase every discount price.
