Advertising and Price

Price is an important consideration in buying decisions. Every one of us would like to know the price of a product for comparison purposes before finally deciding to buy. Indian consumers are, by and large, price conscious. Some people may not sometimes be mindful about the price of some product. At other times, the price for most of them plays an important in their buying decisions. Price is also indicative of quality. Many people equate price with quality. The costlier the product, the better the quality. The reverse is also true. If a product costs less, we immediately feel that it cannot be of good quality. Pricing a product is an important and critical activity. If a lower price is fixed, it will affect the profitability of a business; and if a higher price is fixed, the product will not be able to stand in competition and may be priced out of the market. Therefore, the right price has to be fixed. Then, the right price has to be fixed. Then, there are various pricing methods – such as the skimming and penetration pricing of new products; and the marginal pricing versus the full cost pricing method.