StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Prices as a Set to Satisfy Demand - Essay Example

Cite this document
Summary
"Prices as a Set to Satisfy Demand" paper argues that prices are often set to satisfy demand or to reflect the premium that consumers are willing to pay for a product or service. Some critics shudder, however, at the thought of $2 bottles of mineral water, $150 running shoes, or $500 for the concert. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER91% of users find it useful
Prices as a Set to Satisfy Demand
Read Text Preview

Extract of sample "Prices as a Set to Satisfy Demand"

Prices are usually set whilst taking into consideration the consumers’ ability to buy the products. This helps the company understand its basis in line with the sale of the products. Prices are usually set with respect to the industry’s prevalent criteria and this generally gives a better comprehension of the way the consumers would be able to purchase the products off the shelves.

A firm would eventually lower its prices when it feels that the competitive activity has started to make its mark within the relevant industry and when the customers are easily switching over to cheaper priced goods. The value of pricing wars is significant since economic recessions hit any market in a specific period of time and thus take the bulk of the customers away with it. (Newman, 2006)  A firm would ultimately resort to lower price levels as the competition gets heated up and when the rivalry amongst competitors is of immense importance for the overall well-being of the major players involved within the trade industry.

Price is a major determinant of a firm and lowering it would mean that it has accepted the strengths of the competitive rivalry and thus economic rundowns are a major given under such settings. (Decoy) Pricing is difficult to set internationally because there are different pricing indices all over the world. More than that, there are different currencies which are existent in various nations of the world. Apart from this perspective, there is the understanding which discusses each pricing index to be seen in the light of several mannerisms in which pricing is levied on the said products.

This could include the off-the-rack pricing which means the product is sold at a price that is balanced with similar products, or it is skimmed high so that prestige issue arises from the equation. At times, the product is priced with respect to penetration levels, which keeps its price low when we compare it with similar products. However, on all fronts, pricing in a global concern requires a single currency to be had in the first place and more than that, economies need to be of a similar level to make the pricing uniform the world over. 

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Prices are often set to satisfy demand or to reflect the premium that Essay, n.d.)
Prices are often set to satisfy demand or to reflect the premium that Essay. https://studentshare.org/miscellaneous/1719066-prices-are-often-set-to-satisfy-demand-or-to-reflect-the-premium-that-consumers-are-willing-to-pay-for-a-product-or-service-some-critics-shudder-however-at-the-thought-of-2-bottles-of-mineral-water-150-running-shoes-or-500-for-concert-or-major-spor
(Prices Are Often Set to Satisfy Demand or to Reflect the Premium That Essay)
Prices Are Often Set to Satisfy Demand or to Reflect the Premium That Essay. https://studentshare.org/miscellaneous/1719066-prices-are-often-set-to-satisfy-demand-or-to-reflect-the-premium-that-consumers-are-willing-to-pay-for-a-product-or-service-some-critics-shudder-however-at-the-thought-of-2-bottles-of-mineral-water-150-running-shoes-or-500-for-concert-or-major-spor.
“Prices Are Often Set to Satisfy Demand or to Reflect the Premium That Essay”. https://studentshare.org/miscellaneous/1719066-prices-are-often-set-to-satisfy-demand-or-to-reflect-the-premium-that-consumers-are-willing-to-pay-for-a-product-or-service-some-critics-shudder-however-at-the-thought-of-2-bottles-of-mineral-water-150-running-shoes-or-500-for-concert-or-major-spor.
  • Cited: 0 times

CHECK THESE SAMPLES OF Prices as a Set to Satisfy Demand

UK Government and Measures to Reduce the Alcohol Consume

The resources that are available are not enough to satisfy the needs of everyone concerned.... The resources that are available are not enough to satisfy the needs of everyone concerned.... The article states that the low prices set by the government would only have affected one of the thousands of price-cut alcohol deals.... rom this study it is clear that many see that the government efforts at setting minimum prices for alcoholic products will only solve half of the problem because there are many alcohol companies which have the capacity to produce alcoholic beverages at the set price and still rake in millions in profits....
7 Pages (1750 words) Essay

Essentials of Marketing

The case study "Essentials of Marketing" states that marketing is termed as the process of planning and executing the idea, price, promotion and the channels of distribution of goods and services and also of ideas that tend to satisfy the organization and the individual.... The rates of Easy Jet are relatively low as compared to British Airways and this is due to the fact that the demand for the low-cost carrier is always high as compared to British Airways.... Role of Pricing The fundamental rule of supply and demand states that when there is an excess of supply over demand, the price tends to go down and when there is an excess of demand oversupply of products, the price tends to rise....
6 Pages (1500 words) Case Study

The New Strategy of Price and Product

he new product development process seems to be lacking or non-existent; diversification, an integral component of Ansoff's Growth Matrix requires that products or services be branded (segmented) to satisfy different customers.... Differentiating TiVo's service from recording with different prices is one but inadequate service segmentation....
6 Pages (1500 words) Case Study

Way to Get Efficient Allocation of Recourses

hellip; 21), "the market is defined as the persons or companies who have or may have the need we are intending to satisfy with the product or service that we sell".... Ability to give the goods is connected with use of the limited resources, which are not always enough to satisfy needs of all people.... uyers forms demand for the goods and services.... Hence, constantly increasing needs form the demand.... In the economic theory there is a standard definition of demand....
3 Pages (750 words) Essay

The Economists Dictionary of Economics

icroeconomics is a field of economic study that focuses on how an individuals behavior and decisions affect the supply and demand for goods and services.... Theoretically, all markets are perfectly competitive, with supply and demand driving prices.... However, individuals and groups can directly affect the supply and demand of products and services.... Labor economics, for example, is based largely on the analysis of the supply and demand for labor of different types....
6 Pages (1500 words) Term Paper

Understanding Crude Oil Prices

Thus, there will be an escalation of prices as demand shifts against an inelastic supply in the short-run.... As the quantity of crude oil produced becomes less in comparison to what is demanded, then the law of demand acts in a manner that… At the same point in time, due to the high levels of crude oil demanded, producers raise their levels of production so as to maximise on the returns being derived from the sales of crude oil.... Below is a graphical illustration of the behaviour of demand and Obviously, from the graphical illustration, more is supplied while prices are higher than when they are low....
5 Pages (1250 words) Essay

Marshallian Demand and Supply Theory

The paper “Marshallian demand and Supply Theory” examines the Marshallian model of supply and demand, which tries to present those choices that the customers would make in each price and wealth situation.... It shows the choices of the customer in terms of his demand over a range of prices.... Quite understandably, over demand would increase as the prices keep on increasing since these share a negative relation with each other....
6 Pages (1500 words) Assignment

The Concept of Marketing Mix: the Product Image and Availability

When selecting a product it is important to know what we are offering is in demand and trend.... Any product or services we intend to offer to our consumers should be updated and in demand for making the business work.... This research and implementation come under marketing mix....
14 Pages (3500 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us