Comments on: What considerations should an organization take into account while creating a pricing strategy? http://www.rutgersforlife.com/organization-strategy/what-considerations-should-an-organization-take-into-account-while-creating-a-pricing-strategy Sat, 04 Feb 2012 08:29:59 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: united9198 http://www.rutgersforlife.com/organization-strategy/what-considerations-should-an-organization-take-into-account-while-creating-a-pricing-strategy/comment-page-1#comment-612 united9198 Wed, 30 Dec 2009 06:23:59 +0000 http://www.rutgersforlife.com/organization-strategy/what-considerations-should-an-organization-take-into-account-while-creating-a-pricing-strategy#comment-612 Knowledge of the marketplace is critical. If there are options or competitors, what do they charge? Of course knowing what the total cost of a product is necessary to determine the level of profitability, but selling at the maximum logical price is a better strategy.<br><b>References : </b><br> Knowledge of the marketplace is critical. If there are options or competitors, what do they charge? Of course knowing what the total cost of a product is necessary to determine the level of profitability, but selling at the maximum logical price is a better strategy.
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]]> By: eight_ball8 http://www.rutgersforlife.com/organization-strategy/what-considerations-should-an-organization-take-into-account-while-creating-a-pricing-strategy/comment-page-1#comment-611 eight_ball8 Wed, 30 Dec 2009 05:40:59 +0000 http://www.rutgersforlife.com/organization-strategy/what-considerations-should-an-organization-take-into-account-while-creating-a-pricing-strategy#comment-611 In a general sense the most critical thing to analyze is the price point that maximizes overall profit. This requires knowledge of the elasticity of demand and the cost structure for procurement and / or manufacturing. A luxury car manufacturer will therefore have a very different pricing strategy than a wheat grower because the price elasticities will be very different. In specific situations to gain market share and scale advantage, a company might choose to price a product lower than its optimal profit point in order to establish in the market. Hence, the concept of the introductory price.<br><b>References : </b><br> In a general sense the most critical thing to analyze is the price point that maximizes overall profit. This requires knowledge of the elasticity of demand and the cost structure for procurement and / or manufacturing. A luxury car manufacturer will therefore have a very different pricing strategy than a wheat grower because the price elasticities will be very different.

In specific situations to gain market share and scale advantage, a company might choose to price a product lower than its optimal profit point in order to establish in the market. Hence, the concept of the introductory price.
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