Step 6: Selecting the Final Price
There are other factors which a company must consider before setting final price.
Impact of Other Marketing Activities
A product’s brand quality and advertising affects its price. Consumers are often willing to pay higher prices for known products than for unknown products.
Price is also not as important as quality and other benefits in the market offering. For example, a firm with better customer support is able to charge higher prices for its products.
Gain-and-risk Sharing Pricing
Products with longer warranty period and more extensive coverage can command higher prices.
Company Pricing Policies
Customers often get discounts for buying certain products in bulk. Clients get better pricing for signing long term contract with their service providers. Airlines charge penalties to those who change their reservations on discount tickets.
Impact of Price on Other Parties
How will competitors react? How will distributors and dealers feel about the price? Will they make enough profit? Will the government intervene and prevent the price from being charged?
These are the other factors a firm must take into consideration.
Reference: Kotler & Keller, “Marketing Management”, 12th edition