Category: Pricing: The Four Main principals of Marketing
Marketers must be able to analyze the price (to the consumer) that a product has, especially in comparison to competitors. Other factors are also taken into consideration such as the established price points and the target consumer’s sensitivity to price fluctuations. The price of a product is the amount that customers pay for it. Marketers must relate the pricing to the product’s actual and perceived worth, as well as supplier costs, seasonal reductions, and rival prices. Business leaders may boost the price to give the goods the illusion of being a luxury item in specific situations. Alternatively, they may reduce the price to encourage more people to try the product. Marketers must also decide when and whether discounting is necessary. A reduction may attract more buyers, but it may also convey the impression that the product is less unique or luxurious than it was when it was priced more.
A good pricing example would be that of clothing brands in the so called fast fashion industry. ASOS is a multinational casual wear clothes company based in the United Kingdom. ASOS, like its competitors—other well-known casual wear businesses like Bershka or Zara—creates low-cost, everyday-wear clothes. ASOS stands apart because it develops new, high-quality items. It is able to do so by obtaining fabric from its material manufacturing partners, secure stable, high-quality materials at cheap prices by ordering in big quantities, and consistently pursuing the highest-quality and lowest-cost material available on the market. The firm also negotiates directly with its suppliers and has formed strategic ties with high-quality, creative UK suppliers.
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