Lumen Learning 2016 What factors do organizations consider when making pricing

Lumen learning 2016 what factors do organizations

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not the value of the product or service. (Lumen Learning, 2016) What factors do organizations consider when making pricing decisions? Explain the difference between a penetration and skimming pricing strategy. Organizations must consider many factors when making pricing decisions. When making pricing decisions organizations consider: Customers, Competitors, the economy and government laws and regulations, and production costs. The penetration pricing strategy is when a product is released with a low initial price. Firms use this strategy when the product being released is in a crowded category. This strategy is used to encourage buyers to consider the lower priced product. The skimming pricing strategy is used when retailers release a product with a high initial price. This strategy is used for products that consumers are willing to pay more for to be early adopters.
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Reference Tanner, J. & Raymond, M.A. (2015). Principles of Marketing. University of Minnesota Open Textbook Library. Licensed under a Creative Commons by-nc- sa. Barten, L. (2017, September 26). Definition of profit-oriented price strategy. Retrieved from - price-strategy.html Lumen Learning. (2016). Pricing objectives | principles of marketing. Retrieved from - pricing-objectives/
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