Are you student who learn pricing strategy in your campus? Are you home business owner who want to set your product's price? Are you marketer practitioner who will perform pricing analysis for the new product?

Whoever you are, if you want to know about all about pricing, such as: pricing strategy, pricing analysis, pricing methods, things that influence pricing, and other pricing factors, you can read this article and the next one that discuss about pricing.

This article will be continued with more deep information about pricing. The goal of this article and the next one : You get a comprehensive understanding about pricing concept, analyze all things to obtain proper price, and set the suitable price, etc.

OK, let's start with the pricing concept.

The concepts of pricing

1. Pricing is observed by two point, one is viewed by consumer and the other is observed by producer.

a. From consumer viewpoint, pricing is all things related to monetary costs that are spent by consumers to obtain certain goods.

b. From producer viewpoint, pricing is the thing that differentiate his offer from competitor.

2. Price fixing is one of the strategic role in the company.

3. There are several conditions and things which affect the price fixing, they are:

a. Deregulation or government regulation.

b. A tight global competition.

c. The speed of growth.

d. The opportunity of gaining more market share.

4. Pricing directly works on financial performance. The more appropriate the price, the better financial performance will be obtained.

5. The price has importantly affect consumer's perception and branding.

6. If consumer feel difficult to evaluate a product thoroughly, pricing can be used as a product quality measurement.

7. There is relation between the amount of product request and the price fixing.

8. Production cost and distribution cost affects price fixing.

9. Product features, benefits, and customer satisfaction specify maximum price fixing.

10. Rigorous competition and government policy will specify real pricing or effective pricing.

11. Three important factors of price fixing:

a. Product target market.

b. Kind of product or service.

c. Product distribution channel.

12. Functions of pricing in positioning strategy:

a. Psychological factor.

It means high price is an indication that the product has excellent quality.


b. Competition instrument.

Price can be utilized to beat competitor or to substitute a product value.

Above are 12 fundamental concepts of pricing you must know. I will continue writing about pricing in the next article. So, please wait for another pricing article. Thank you for reading. If you get benefits by reading this blog, please fell free to visit again and tell your friend about this blog.