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Price is no doubt one of the most important decision areas of manufacturing performance management. Prices and sales volume together determine the income of any business. As the sales volume in itself is dependent on the price, the price really is the key to business income. Price is very important to gain as well.
Stated simply, the price is the exchange value of the product. In fact, prices hover around the two element-utility and value. Utility is a property of generic products to meet customer needs or wants. Value is the value attached to the quantitative consumer product, which he's willing to part with certain quantum money.
Two categories of factors - internal and external factors - affect the price of any company's decision. Within each category may be several economic factors and some psychological factors; again several quantitative and qualitative factors may be quite another. This company has a particular long-term goals as well as direct-in price. For example, a certain cost of production and marketing, and trying to recover costs through rates.
Companies may have a basic philosophy about the price. company's pricing decisions must be consistent with the philosophy. Price should also be consistent with overall corporate objectives. These companies are also looking for a specific public image despite its pricing policy. All these are internal factors that influence the price. In addition, pricing strategies must be compatible with the overall marketing strategy. It can not exist interdependently.
In addition, each business company must face a series of external factors while formulating the pricing strategy. In the first place, the economic nature and the nature of competition must be taken into account. Consumer purchasing power should also be taken into account. Bargaining power of key customer groups and groups of suppliers is another important consideration.
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