Pricing can be a manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or retail pricing strategies pdf campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus, pricing is the most important concept in the field of marketing, it is used as a tactical decision in response to comparing market situations.
Price is influenced by the type of distribution channel used, the type of promotions used, and the quality of the product. Price can act as a substitute for product quality, effective promotions, or an energetic selling effort by distributors in certain markets. Marketers develop an overall pricing strategy that is consistent with the organisation’s mission and values. This pricing strategy typically becomes part of the company’s overall long -term strategic plan. The strategy is designed to provide broad guidance to price-setters and ensures that the pricing strategy is consistent with other elements of the marketing plan. In some cases, prices might be set to de-market. The aim of value-based pricing is to reinforce the overall positioning strategy e.
Where the objective is to encourage or discourage specific social attitudes and behaviours. Tactical pricing decisions are shorter term prices, designed to accomplish specific short-term goals. Accordingly, a number of different pricing tactics may be employed in the course of a single planning period or across a single year. Typically line managers are given the latitude necessary to vary individual prices providing that they operate within the broad strategic approach.