Manac Plc. Models and concepts affecting the pricing decisions taken Essay

Manac Plc. Models and concepts affecting the pricing decisions taken by organizations, critically reflecting upon their usefulness - Essay Example The pricing policy of a firm is affected by a number of factors which contains the variable and fixed costs of the firm and the ecological factors which contains competitor analysis and legal analysis. Pricing models can be utilized to explain, forecast or explain pricing circumstances, or to prescribe pricing decisions. Irrespective of their planned use, however, models are basically abstractions of actuality. Even though they are less difficult than the real world, models should have relevant possessions of the realism they are calculated to represent. A number of more particular criteria served as the foundation for evaluating the pricing models are reviewed. Two criteria are valid to the assumptions on which the form is based. Such assumptions must be stated openly so that the user is cognizant of their existence and so able to assess their relevance and importance. Secondly, the assumptions must be realistic. â€Å"The pricing decision is a critical one for most marketers, yet the amount of attention given to this key area is often much less than is given to other marketing decisions. One reason for the lack of attention is that many believe price setting is a mechanical process requiring the marketer to utilize financial tools, such as spreadsheets, to build their case for setting price levels† (Pricing Decisions 1998). ... However, pricing decisions have vital consequences for the marketing organization and the concentration given by the dealer to pricing is just as significant as the concentration given to extra identifiable marketing actions. Some significant causes affect pricing include: Most Flexible Marketing Mix Variable: For dealers, price is the large amount variable of all marketing choices. Unlike distribution and product decisions, which can take years or months to change or several forms of promotion which may be time consuming to change, price can be changed very quickly. The elasticity of pricing choices is chiefly significant in times when the dealer seeks to rapidly stimulate demand or respond to contestant value actions. For instance, a marketer can get on a field salesperson’s request to lesser cost for a possible vision throughout a phone discussion. Similarly, a dealer in charge of online processes can raise costs on hot selling products with the click of a few website butto ns. Setting the Right Price: Pricing decisions made quickly without adequate research, analysis and planned evaluation can lead a losing income to the marketing organization. Prices set also may signify that the company is missing out on extra profits that could be earned if the target market is eager to spend extra to obtain the product. Furthermore, efforts to raise an originally low priced product to a higher cost can be met by consumer resistance as they can feel that the dealer is effecting to take benefit of their consumers. Setting of high prices can also impact on income as it prevents interested consumers from purchasing the manufactured goods. For setting the right price, substantial market knowledge is important and mostly, with new products testing of different