How Price Is Important Factor That Affects Consumer 's Choice

1353 Words Nov 29th, 2016 6 Pages
Price is what a customer have to pay to acquire a product, or cost of a product to a customer. Price is considered to be the most significant factor that affects consumer’s choice. (Kotler, Armstrong, Lloyd& Nigel, 2013). It is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service” (Kotler and Keller, 2016). Pricing is a key decision for an organization in that it affects its revenue and profitability, and a company that is not profitable cannot survive for long. In the product price determination process, the management needs to consider the costs of production associated with the product and also the customer’s perception on the value of the product. Moreover, companies strive to get the maximum margin by looking at a whole range of possibilities to set the right price to certain types of customer. According to Kotler and Armstrong (2014), price is one important element of marketing mix and therefore needs key attention as it harvests the value created by other marketing mix variables. Managers should consider a number of alternative pricing strategies and opt for the strategy that will deliver value, both for the consumer and the company. Some price decisions may involve complex calculation methods, while others are intuitive judgments. They should select a pricing strategy based on the product, customer demand, the competitive environment, and the other products…

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