The demands and wants of consumerare increasing and changing day by day. In this case, producers have to take care of many things before settingbest pricefor the product and services they are offering. The best price setting for a product or service usually revolves around the customer. It is the customer, who is going to decide the price of product and service because for the producer the satisfaction of its end users is the primary and important objective. But, what would be the best price for the customer? This question can put seller or producer in trouble. Is the low price with low quality or high quality, is the best price for customer or the high price with low quality or high quality is the best price for the customer.
Generally, customer perceives that product or service having low cost is of bad quality but it is not always the case. The market does contain producer that sell product and services at low price with excellent and reliable quality for e.g. Wall Mart. But again the question is, is the low cost always the best price for the customer? The answer is NO. Low price is not always the best price for customers. There are buyers in the market that seek for good product and services but not at low price. Even quality for some such buyers doesn’t matter, they are willing to pay high price only for their status consciousness.
In this confused world, where producer/seller gets in trouble to decide the best price for their customer can be resolved by adopting following few things:
- If producer has gained confidence, build trust, good terms and relationships with consumers/buyers at his first purchase, then no matter whatever the price you are offering the consumer will buy your product/service again and again. This concept revolves around “First impression is the last impression”.
- The market segment that the producer is going to target must be clear to him. It will help producer to manufacture, design and sell the product/service in accordingly and setting best price will also get an easy task.
- The competition in the market segment in which produceris going to introduce his product/service is also an important aspect which helps him to decide the best price for his customer i.e. rival’s pricing strategy will help him to decide thebest price.
- Producer/seller should have to be keen and sharp while negotiating price withhis customers. As businesses are meant to earn profit while satisfying the needs and wants of your customers.
Although the best price revolves around the customer purchasing behavior but it is also important that producer or seller must also see his own pocket while looking at the pocket of his customers.
“The Best” price should be the “Effective Price”, which means that it should keep the both ends happy and wealthy. If producer is offering a price that meets his financial goals and at the other end consumer gets satisfied after the purchase of the product or service that his money spent was worthy enough then that price would be known as the Best price.
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