How much do you think we ought to sell it for? This is the question frequently asked by the executives who have the responsibility for pricing the products, or service they produce.
How much do you think people will pay for this item? or how much should we ask for it? The question would then be in accordance with the generalization that prices are always on trial. A price is simple an offer on experiment to test the price of the market.
If customers accepts the offer, this price is fine, if the reject it, the price usually will be changed because in marketing a product, it must involve two or more people one side will be the offer, while the other will accept to the offer, if this does not exist it then means that nothing has takes place if the price is not accepted by both party. The price will either be changed or the product will be face out from the market by other forces.
Before being concerned with actual price determination however, execution should understand the meaning and importance of price and they should decide on their pricing goals.
To cap it all, pricing is considered by many to be key of activities within the capitalistic system of real enterprise.
The market price of a product influence wages, rent, interest and product, that is price of a product influence the pay for the entrepreneurship.
Price thus is a base regulator of the economic system because it influences the allocation of these factors of production.
High wages attract labour, high interest rates attract capital and so on.
In it role as an allocate of scarce resources price determine what will get, how much goods and services (demand).
Pricing takes an added importance during the inflationary period such as we have been experience for the past several years in the developed states.
Consumer confidence in the economic, consumer buying psychology an especially affected by price movement during inflation.Pricing strategies adopted in marketing of alluminium product in Nigeria