Selecting the Final Price

Pricing methods help business to find out the final price. Other factors that help to set the final price are:

•  Psychological pricing
•  The influence of other Marketing-Mix elements
•  Company pricing policies
•  Impact of price on other parties.

Let us discuss each of them one by one.

i.Psychological Pricing

Many consumers feel high priced product offers high quality. If a consumer knows about the quality features of a product, price plays a less significant role in comparison to quality. When a consumer thinks of buying a product they keep some budget in the mind which is decided by the past prices, current prices, or the buying situation. Mostly high priced product is thought of to have a high quality. So at times increasing the rates of a product increases the sales also.

ii. The influence of other Marketing Mix Elements

The final price of a product depends on the other marketing mix elements also like the advertising, brand name etc.

iii. Company Pricing Policies

The price of any product set should be decided according to the company's pricing policies. In many companies a pricing department is set up to make sure that product price should be reasonable for the customers, and that should give profit to the company also.

iv. Impact of Prices on Other Parties

According to Kotler, Management must also consider the reactions of other parties to the contemplated price.

•  How will distributors and dealers feel about it?
• Will the sales force be willing to sell at that price?
•  How will competitors react?
• Will suppliers raise their prices when they see the company's price?
•  Will the government intervene and prevent this price from being charged? - In this case the marketers should know the laws regulating prices.