Pricing as an Art and a Science. Pricing is a delicate balancing game. It requires a bit of art here, a bit of science there and a whole lot of testing. When setting a price, a company is mostly between a rock and a hard place. A high price will send away customers and a low price will affect the income of the company. There are so many variables involved in determining a price. On one side, a highly priced commodity will high return per item, and on the other side, a low priced commodity will bring more money out of the big volume of sale. So how do companies fix their commodity prices and services charges? Pricing as an Art and a Science.
Different regions will require different cost to cater for extra cost, say shipping cost. Other markets also may have external forces such as government regulations where a government may set a ceiling price (Furtwangler, 2009). To come up with a price, a marketer must also carry out a competition analysis to know how other competitors are pricing their similar commodities. Last but not the least; a market must also analyze the quality of the product. Often consumers are willing to pay an extra coin for a quality product. Pricing as an Art and a Science.
Furtwengler, D. (2009). Pricing for profitability: How to command higher prices for your products and services. San Francisco: AMACOM Div American Mgmt Assn. Pricing as an Art and a Science.
Philips, R. L. (2005). Pricing and revenue optimization. Stanford: Stanford University press.
Sodhi,M. & Sodhi,N. (2008). Six sigma pricing: Improving pricing operations to increase profits. New York: FT Press. Pricing as an Art and a Science.