Determining the Prices of Products

1816 Words8 Pages
With the coming of the global marketplace on the Internet, would “Uniform Global price” become a reality? Introduction: What is the ‘Price’ of a product? How is the price of a product determined? Why is the price of an Apple iPhone relatively higher than the price of other Smartphone having the same or even more features? Read on … Pricing is one of the key functions of the finance as well a marketing department of any company whether it is a manufacturing concern or a service provider. On one hand, the finance department decides the margins and other costs involved in bringing the product or service to a condition for final consumption, the marketing department analysis the market conditions, determines the consumers purchasing power and behavior and various other factors which would influence the sales of their product in the market. However, as questioned above, how is the price of a product determined and why is the price of an Apple iPhone relatively higher than the price of other Smartphone having the same or even more features? Here is the answer! The price of a product or a services is an addition of the cost to bring the product to its final stage, the charges relating to the types and number of distribution channels, ‘the brand value, first mover advantage, product innovation’, and the final constituent of the price, the profit margin. Wonder why the brand value, first mover advantage and product innovation were quoted together? Well that bring us to the answer of the question relating to the pricing of Apple iPhone’s whose prices are mainly a combination of the brand value in the market which acts as a status symbol for many consumers and the first mover advantage due to the innovation of what we called the innov... ... middle of paper ... ...nd You.Com? Drivers of Price Dispersion Among E-tailers. Working paper University of Maryland. 5. Lee K. & Carter S., (2012), “Global Marketing Management”, Oxford University Press. 6. Keegan W., & Green M., (2013, 7th Ed), “Global Marketing”, Pearson 7. Abercrombie & Fitch going bigger in Asia and opening first Hollister stores in Australia - Columbus - Business First. 2013. Abercrombie & Fitch going bigger in Asia and opening first Hollister stores in Australia - Columbus - Business First. [ONLINE] Available at:http://www.bizjournals.com/columbus/news/2013/02/22/abercrombie-fitch-expanding-to.html 8. Abercrombie And Fitch Announces Plummeting Sales Amid CEO Controversy. 2013. Abercrombie And Fitch Announces Plummeting Sales Amid CEO Controversy. [ONLINE] Available at:http://www.huffingtonpost.com/2013/05/24/abercrombie-sales-ceo-controversy_n_3332601.html.

More about Determining the Prices of Products

Open Document