Importance of Market Pricing

Determination of market pricing is an important step of the procedure of marketing. The pricing of a particular product or service is influenced by several factors and strategic goal is one of the most influential factors. A new business while penetrating in a market often reduce the price of their product or service in order to capture a good share in the market or just to popularize their products. Market analysis has shown this trend over a period of time. Often this results in creation of huge numbers of customers within a short span of time.

Depending on the type of demand, either high or low, the price of any commodity or service varies accordingly. Even the price of the product of one’s own competitor affects the price of one’s own product. If your competitors are changing a relatively low price than yours, then you have no other alternative but to reduce the price of your own products or services. On the other hand, if your competitor is increasing the price, you have every opportunity to increase the price of your own goods too. However, before taking any step, a proper market analysis should be conducted.

Apart from the unpredictable trend of demand, the three major factors which determine the price are cost of time, money and material. Time is equal to money and how much time you are spending for selling your service or product. The cost of the raw materials as well as other miscellaneous expenses in terms of real money should be taken into consideration. Are the customers willing to pay such price for your product? Are they looking for some discounts?

Pricing of a product is very crucial and its survival often depends on a correct pricing. If the price is too low or too high, customers might not show their interest in such products or services. Check http://www.blue-sky-ltd.com for more details on market pricing and price determination.