Pricing is one of the key strategies for a company to
establish themselves in the market. The price for any product/service will
affect its demand, especially in a country like India where people are so price
sensitive. The price will be the key factor in determining the sales of the
product. No matter how good the product is, if it does not fit the pocket of
the consumer segment it wishes to cater,
it would not be sold. Hence a flop show.
Therefore, should be extremely cautious while pricing their
product. On one side it should price the product to cover all its cost and
maintain a profit margin for itself. On the other hand it should be careful
that it does not price the product so heavily that the consumers are not able
to purchase it.
Sometimes companies in order to attract customers offer
products and services free of cost. The recent example is RELAINCE JIO. The
company has offered free voice calls and data services to a certain period of
time. This has helped the company gain a customer base at a drastic pace. And
has made the company talk of the nation.
Some companies intentionally keep the prices of their
products and services high to differentiate itself from others. It has to
provide its customers with the superior status quality and that the customers
have an exotic and rich taste. BMW,AUDI, HARLEY DAVIDSON are some such
companies offering prices which determine status of customers.
Digits in the price tag are quoted according to the target
markets’ psychology and hence the companies enjoy the benefits of customer
loyalty.
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