Price market

Nowadays everything has a price: food, clothes, services, etc. That is why it is very important to our lives. Furthermore, in the today world prices are quite high so customers are trying to save their money by searching for the best costs. So it can be said that prices dictate our lives. The other reason why price is extremely important is because it plays one of the biggest roles in the marketing mix.
Marketing mix consists of four elements: product, place, promotion and of course price. The last one is the only which is directly connected with the profit while other have no direct connection with it. From the first look it seems that it is very easy to decide what price should be for a particular product. However, it is one of the most difficult actions as there are some problems that can be caused by setting a wrong price.
First of all, if customer decides to prosecute a price skimming politic, ‘the risk here, of course, is that high price raises high expectations, and if that learning experience does not go well, then market will think that the product quality is too poor or inconsistent to justify the price, a bad reputation will stick and the future of the product becomes questionable’ (Brassington & Pettit, 2003). As a result, it will be very difficult to persuade customers to buy the product.
Secondly, if customer decides to prosecute a penetration pricing there might be other problems. ‘It could establish a poor-quality brand image and also, if it does not work, it would be very difficult to raise the price’ (Brassington & Pettit, 2003). To sum up, this strategy is also risky.
The easiest way to set the price is to do a market research and to estimate a very similar cost. Although it...

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