1. Looking at the market in which your product will compete, is price or nonprice competition most common? What is the range of prices for products that directly compete with yours? In your market, is pricing typically used as a competitive tool in certain situations (such as when launching a new product)? What do you know about the effect of pricing on demand for products like yours? research andExplain about price/non price competition and about demand, as background for your pricing decisions. If more research is needed,explain that you would like to answer as background for making pricing decisions.
2. Next, think about the various factors that affect pricing decisions.Explain about what each of these factors means for your pricing strategy: (1) organizational and marketing objectives; (2) pricing objectives (to increase share, for example, or to generate cash quickly); (3) costs (fixed costs such as rent, variable costs that vary with the number of units sold, and total cost); (4) other marketing-mix variables; (5) expectations of retailers and other channel members; (6) customers' interpretation and response to pricing; (7) competition; and (8) legal/regulatory issues.
3. Now that you have some context for pricing, put your pricing objectives into the spotlight. What, specifically, do you expect pricing to do in support of marketing and organizational objectives? Do you need pricing to attain a certainreturn on investmentor a particularprofitlevel? Will pricing help youmaximize sales, or maintain or increasemarket share? Do you want to promote price stability in your industry? Or will pricing help you signal highproduct quality? Explainexplaining your pricing objectives in some detail, referencing any information from your previous answer to support your reasoning.
4. How do members of your target market perceive pricing for your type of product? If you don't have enough information, how can you research this question? For example, can you read some online product or store reviews in search of comments about pricing, price changes, and price promotions?Explain about the target market's evaluation of price, paying close attention tovalueas perceived by customers. (And if you need additional research, jot a note to follow up.)
5. Before you can settle on a pricing strategy, you'll need to select a basis for your pricing. Will you set pricing by adding to the cost of the product, according to product demand, or based primarily on competing prices? Or is a combination of these appropriate for your product and market? Explainabout the basis or bases you will select, and why.
6. If you're marketing a new product, will you chooseprice skimmingto get the highest possible price orpenetration pricingto achieve market share quickly? The answer depends, in large part, on your marketing objectives as well as your knowledge of the target market and the competition. If your product is going to be new, explain about which pricing strategy you expect to use and why.
7. If your product isn't new, you have other strategy choices. You might choosevariable pricing(charging different prices to different customers for the same product), whether by negotiating the price, setting separate prices for different target markets, or discounting the product at times. Another option isproduct-line pricing, assuming you'll be marketing more than one product within the line. You may usepsychological pricingto influence the target market's perception of your price. Here, you can position your product against a more expensive item, bundle it with another product, package multiple units together at one price, set an everyday low price that doesn't vary, use odd-even pricing to support a certain image or value, price the product as is customary in your industry, or set a high price to convey a quality image. Review your earlier answers about pricing, look again at your objectives, and thenExplainabout your pricing strategy and the rationale.

Company Coca-Cola