Question No. 7 What do you understand by price?
Price is the exchange value of a product or service expressed in monetary terms. It is the money, which the buyer pays to the seller for a product or service. Price is the amount for which a product, a service or an idea is exchanged regardless of its worth to the buyer.
Thus, rent for house, tuition fees for education, and consultancy fees for doctor, fare for bus, taxi or railway, salary to executive is the price in various forms. In short, ‘price’ is the amount of money to be paid in return for a bundle of utilities.
Question No. 8 What is pricing?
Pricing is the function of translating into quantitative terms the value of the product or idea by the marketing manager before it is offered for sale to consumers. Pricing is the process of setting objectives, identifying the factors governing the price, formulating price policies and strategies setting prices, implementing them and controlling them
Question No. 9 What are one price and flexible price policies?
Under one price policy, all the customers who are purchasing a particular quantity at a particular time are charged the same price, i.e., the price is fixed and no changes are made in it.
Under flexible price policy different buyers are charged different prices for the same quantity purchased. The difference in pricing depends on bargaining power of buyer, his paying capacity, personal relationship between buyer and seller and many other such factors.
Question No. 10 Briefly describe ‘meeting competition’ and ‘under the market’ pricing policies.
The companies adopting ‘meeting competition policy’ adjust their prices according to that of the competitors If the competitors lower their prices, they too do the same. On the other hand, if the competitors increase their price, they also follow suit.
‘Under the market policy’ is a policy in which the company always keeps its prices less than those prevailing in the market.
Question No. 11 What are bait pricing and price lining policies?
In bait pricing policy, the marketer keeps low priced and high priced goods. He attracts the consumer by showing low priced goods. Once the customer gets attracted towards the low price goods, he is told about its drawbacks and is encouraged to purchase the other high priced product.
Thus, low priced goods act as ‘Bait’ for attracting the buyer. On the other hand in price lining policy, the various products are priced according to their quality standards. The products may be classified as good, better and best.
Question No. 12 What do you mean by skimming and uniform delivery pricing policies?
Skimming pricing policy aims at extracting maximum profits from the market and as such the manufacturer keeps high price. Uniform delivery pricing policy is one in which the firm bears full transportation cost irrespective of location of buyers.