Cost, Pricing, and Payment - Basic pricing principels
3 important questions on Cost, Pricing, and Payment - Basic pricing principels
What are the elements/questions for pricing decisions?
- What are customers willing to pay?
- What are the supplier s competitors charging?
- What are the supplier s costs involved in the sale?
- What pricing or charging options are available and affordable for the supplier?
--> the most important factor is what the customer is willing to pay.
What are possible key issues a supplier wants to achieve in his market?
- supplier may be trying to develop a permanent market position
- The supplier could be seeking higher short-term profits in a market
- supplier may be seeking to defend, maintain or grow market
- ^fhe supplier may be introducing a new product or offer that has considerable economic value to a customer
When is a supplier going to use new charging/pricing?
A supplier is going to use new charging/pricing as a source of competitive differentiation, particularly where this positively impacts the financial or risk factors for the customer. These
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