Price is an important aspect of marketing this is because it determines whether a consumer will purchase or will not. Since marketing starts and ends with a consumer, pricing determines things like segmentation, sometimes it influences the final decisions of a consumer. Now many people who are the end consumers doesn't know what determines the price of goods and services however inasmuch as a company's or manufacturer's aim is to make profit they reckon a lot with factors like cost of demand, demand for product competitiveness In an open market, purchasing power and a whole lot of others.
Competitiveness In an Open Market I mentioned In one of my videos months ago that competition is healthy because it reduces arbitrariness and monopoly, now a manufacturer enjoying only the patent right to produce a good will definitely determine price because there's no competition from opposing firm to check their excesses. Competitions within these manufacturers favours the end consumers because the more quality offered for an affordable price makes a consumer choose a brand over another. This is currently happening between Xiaomi, Techno and Infinix Mobile.
The Demand Price is a price which a consumer is willing to pay for a good and service. A firm always aims to establish equilibrium between the demand price and the supply price else there might be greater or lesser equilibrium which means higher production or decrease in production, now higher production will mostly signify that consumers are buying at a larger extent which means that prices are likely to increase because of increased demands or lower production will mean that prices are going to reduce. It all depends on the demand price of a consumer.
Demand for Product is also something that determines pricing. Sometimes the demand for a product makes a manufacturer decide whether to Increase or decrease price. fruitful or top notch marketing/hype can raise the demand for a product. The eighth season of the series GAME OF THRONE was the most anticipated television series I had seen in a long time, I don't know if the producers took advantage of this to increase prices for television rights (which of course I think they may) This case scenario is an increased in demand for a product and if a manufacturer has a set price already, this factor might change this in totality.
The purchasing Power Of A Consumer now things like buying power is often influenced by how much a consumer is willing to spend, which might also be determined by his income. Now in geographical segmentation sometimes the price of a good or service can vary let's say in an area like Victoria Island in Lagos Nigeria to a place like Mushin, the consumer buying power is totally different and this might influence a manufacturer to sell their product for different rates in these two places. So the main aim of production is to sell and sometimes the buying power of a consumer influences how prices are set and equally adjusted.
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Cost of production determines the price.
That's just one out of the many determiners, thanks for the comment
Salient points were raised. Open markets help to beat prices down, when there are competitors. Well, that is something most consumers benefit from. However the “demand price” isn’t much of an influencing factor. An innovative product isn’t hampered by “demand price,” cause it’s new.
Take for example Tesla, everyone knows it’s a little overpriced, but people buy them all the time. If a product offers a very good service, people are ready to buy it irrespective of the price.
You're definitely right about this however how many people have that financial power? Test case, I'm using Nigeria as a developing country where people won't still buy the product even when they know it's quality. Samsung mobile is arguably the best device in Nigeria but people know and they won't still buy it.
Yeah, economic buoyancy comes to play. Well, you cannot pay for a product you cannot afford, that’s true. People would pay more for a product with lesser competitors, but Samsung has so many in Africa. So you are not so far from the truth.
Definitely true. Thanks for the brilliant comment by the way
True, And yes balanced price is important to thrive any business.