One manufacturer of electronic product produces such products which need special care while using it. But the company has not given the instructions to consumers. If you were the manager of the company what steps would you take?
(i) Providing information for using the products.
(ii) Consumer awareness/educating the consumers.
A company uses same promotional schemes like ‘buy one, get one free’, free samples, free gifts and so on to boost the sales of its products and earn higher profits. This results in unnecessary hike in the prices of the products. In your opinion, is this policy in the interest of society?
(i) Not in the interest of society, unnecessary increase in cost.
(ii) Increasing extravagancy.
(iii) Increasing sales volume.
(iv) Achieving the objectives of the business.
What do you mean by the price? Explain factors affecting price determination.
Or
There are number of factors which affect the fixation of the price of a product. Explain any four such factors.
Price: It is the worth of a product or service in monetary terms. This money represents the sum of values that consumers exchange for the benefits of having or using the product of service.
Factors Affecting Price Determination:
There are number of factors which affect the fixation of the price of a product and they are:
1. Product Cost: One of the most important factors affecting the price of a product or service is its cost. This includes the cost of producing, distributing and selling the product. The cost sets the minimum rate at which the product may be sold. There are broadly three types of costs: viz., Fixed Costs, Variable Costs and Semi-Variable Costs. A product’s price must at least cover the variable cost to get a marginal profit.
2. The Utility and Demand: While fixing price, the utility and demand for the product must be taken into consideration. While the product costs set the minimum limit of the price, demand of the buyer sets the upper limit of price.
3. Extent of Competition in the Market: The pricing of a product also depends upon the competition for the product. If the product has close substitutes, it cannot fix high price as customers will leave the product and buy its substitute.
4. Government and Legal Regulations: In order to protect the interest of public against unfair practices in the field of price fixing, Government can intervene and regulate the price of commodities. Government can declare a product as essential product and regulate its price. They can also fix price limits within which only one can charge for a product.
“It is necessary that goods and services must be made available to the customer at the right place, in right quantity and at the right time’. Name the concerned element of marketing mix.
The concerned element is Place mix.
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