FACTORS THAT CONSIDER THE PRICING STRATEGY

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FACTORS THAT CONSIDER THE PRICING STRATEGY by Mind Map: FACTORS THAT CONSIDER THE PRICING STRATEGY

1. INFLUENCE THE CHANNEL STRUCTURES

1.1. 1. PRODUCT CHARACTERISTICS

1.1.1. 1. CONSUMER PRODUCTS - WHERE THE PRODUCTS ARE STRAIGHT TO THE CONSUMER WIHTOUT USING ANY MIDDLEMEN FOR THE SERVICES

1.1.2. 2. PERISHABILITY - THE PEROSHABLE GOODS NEED FOR DIRECT SELLING AS BECAUSE OF THE DANGER OF THE FREQUENT HANDLING

1.1.3. 3. UNIT VALUE - THE MORE AMOUNT OF THE TRANSACTION INVOLVE, THE LOWER THE UNIT VALUE

1.1.4. 4. STYLE OBSOLENCE - IT IS BASED ON THE DESIRABLE TO SELL DIRECT TOT HE RETAILERS THAT SPECIALIZE IN FASHION MERCHS

1.1.5. 5. WEIGHT & TECHNICALITY - WHEN THE PRODUCTS ARE BULKY AND LARGE, IT IS USEFUL TO CHOOSE DIRECT CHANNEL

1.1.6. 6. STANDARDIZED PRODUCTS - IF THE PRODUCTS PRODUCES MANY TYPES OF THE PRODUCTS IT IS DESIRED TO HAVE A DIRECT CHANNEL

1.1.7. 7. FREQUENT [URCHASES - FREQUENT PURCHASE NEED DIRECT CHANNEL TO LOWER THE COST OF DISTRIBUTION

1.2. 2. COMPANY CHARACTERISTICS

1.2.1. 1. FINANCIAL STRENGTH - WHEN A COMPANY HAS A STRONG FINANCIAL, IT CAN COVERS ALL THE COSTS INCLUDING THE INTERMEDIARIES COSTS

1.2.2. 2. MARKETING POLICIES - RELEVANT TO CHANNEL DECISION MIGHT RELATED TO DELIVERY AND PRICING

1.2.3. 3. SIZE OF THE COMPANY - BIG COMPANY ARE ABLE TO FAVOR THE DIRECT CHANNEL HANDLING

1.2.4. 4. PAST CHANNEL EXPERIENCE - IF A COMPANY HAS A GOOD EXPERIENCE ON CERTAIN KINDS OF INTERMEDIARIES, THEY WILL CONTINUE TO DO THE SAME

1.2.5. 5. PRODUCT MIX - THE WIDER THE PRODUCT MIX, THE SUPERIOD WILL BE ITS STRENGTH

1.2.6. 6. REPUTATION - A REPUTATION TRAVEL FASTER THAN THE MAN DOES

1.3. 3. MARKET CHARACTERISTICS

1.3.1. 1. CONSUMER HABITS - THE CONSUMER DIERIABLE TO BUY CERTAIN PRODUCTS IN ONE PLACE

1.3.2. 2. LOCATION - MANY CUSTOMERS MAY PREFER A GEOGRAPHICAL AREA THAT ARE APPROPRIATE AND NEAR TO THEM

1.3.3. 3. NUMBER OF CUSTOMERS - IF THE NUMBER OF CUSTOMERS ARE IN LARGER AMOUNT, THE CHANNEL OF DISTRIBUTION MAY BE INDIRECT AND LONG

1.3.4. 4. SIZE OF ORDERS - IF THE CUSTOMERS ARE BUYING A LARGE AMOUNT, DIRECT SELLING IS PREFFERED

2. INTERNAL FACTORS

2.1. 1. RETURN ON INVESTMENT (ROI) - WHERE THE COMPANY SETS A CERTAIN PRICE TO GAIN BACK THE ROI OBJECTIVES

2.2. 2. CASH FLOW - MAKING SURE THE CASH FLOW CAN COVER THE PRODUCTION COSTS WITHOUT GETTING ANY LOSSES ESPECIALLY THROUGH TEH NEW PRODUCTS

2.3. 3. MARKET SHARE - MAKE SURE THE PRICE OF THE COMPANY WORTH MORE OR MAINTAINING THE EXISTING PRICE OF THE MARKET

2.4. 4. MAXIMIZE PROFITS - OLD PRODUCTS ARE MORE LIKELY TO STOP GROWING AND IT MIGHT JUST SET A CERTAIN RICE JUST FOR THE GAINING PROFITS

2.5. 5. FIXED COSTS - COST OF MARKETING ORGANIZATION THAT ARE NOT AFFECTED BY SALES

2.6. VARIABLE COSTS - THE ASSESSED ON A PER UNIT BASIS SINCE ITS CONNECTED TO INDIVIDUAL ITEMS

3. EXTERNAL FACTORS

3.1. 1. ELASTICITY OF DEMAND - THE PRICE IS BASED ON THE DEMAND OF THE CONSUMER. IF THE CONSUMER WANTS MORE OF A PRODUCT, THE PRICE WILL GET LOWER FOR THE DEMAND NEEDED.

3.2. 2. CUSTOMER EXPECTATIONS - NEED TO GIVE THE CUSTOMERS THE EXPECTATIONS WORTH THAT GOES THE SAME WITH THE PRICE POINTS

3.3. 3. DIRECT COMPETITOR PRICING - SOME OF THE PRODUCT PRICING ARE BASED ON THE COMPETITOR. IF THEY PRODUCES A PRICE THAT THE AVERAGE AMOUNT WITH THE COMPETITOR, IT CAN BE FIT FOR THE PRICES

3.4. 4. RELATED PRODUCT PRICING - FOR EXAMPLE, JOINING A BAKING CLASS THROUGH ONLINE CLASSES. THE PRICES WILL BE CHARGED BASED ON THE SERVICES ALLOWS

3.5. 5. PRIMARY PRODUCT PRICING - FOR EXAMPLE, BUYING A HAIRDRYER WITH A COMB AS A COMPLENTARY PRODUCT

3.6. 6. GOVERNMENT REGULATIONS - NEEDS TO BE AWARE OF REGULATIONS THAT INFLUENCE HOW PRICE IS SET IN THE MARKETS IN WHICH THEIR PRODUCTS ARE SOLD

4. INTERMEDIARIES CONSIDERATIONS

4.1. 1. SALES VOLUME POTENTIAL - SHOULD CONSIDER THE CAPABILITY OF THE INTERMEDIARIES TO ENSIRE THE SALES CAPACITY

4.2. 2, AVAILABILITY - A COMPANY SHOULD MANAGE ITS OWN CHANNEL TO HAVE THE RIGHT TYPE OF INTERMEDIARIES

4.3. 3. INTERMEDIARIES'S ATTITUDE - A COMPANY ALLOW TO ADOPT THEIR OWN PRICE POLICY

4.4. 4. SERVICES PROVIDED - THE SERVICES SUCH AS REPARING, AFTER-SALE SERVICES SHOULD BE APPOINTED WHO CAN PROVIDE THE SERVICES OR ELSE IT WILL IMPLEMENT A DIRECT SELLILNG CHANNEL