The Law Of Increasing Costs
Why Is Pricing Important?
Pricing is an extremely important component of marketing, considering it helps determine how many consumers buy a product or service and, ultimately, whether a concern succeeds or fails. A business organization owner must employ a number of strategies to determine the right price for various appurtenances and services that yields a profit without discouraging customers from patronizing his business organisation.
Prices must be competitive if a business is to succeed. Charging too much for a product or service discourages customers from even doing business at a particular identify. A businessman, nevertheless, does not desire to cut his profits so severely that his business concern does not survive. If his prices are too high, too few products sell, and the overhead toll per product rises, costing the owner money. Sometimes a businessman wants to consider selling a particular production at a lower toll than his competitors. These items are known equally loss leaders. While he makes less coin on that one particular, his profits oft rise for a couple of reasons. With the lower price, he brings in new customers who potentially become permanent patrons, and those who come up in to buy the one item often purchase other items while they are shopping. On the other hand, a man of affairs must take intendance not to price items so low that they are perceived as being of poorer quality. Customers tend to believe overall that they get the quality for which they pay. Pricing is a fragile rest. When washed poorly, business owners risk losing customers.
The Law Of Increasing Costs,
Source: https://www.reference.com/business-finance/pricing-important-a2f16d8a390ff548?utm_content=params%3Ao%3D740005%26ad%3DdirN%26qo%3DserpIndex&ueid=651f6701-7d75-482c-9994-b6778b519a89
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