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Building Your Marketing Plan - Essay Example
Author : tierrahilll
Pages 3 (753 words)
Pricing is one of the key aspects of ensuring that the business earns enough to survive and provide a return to the shareholders. Prices which are adequately set therefore are considered as one of the key for providing competitive advantage to the firms. Pricing therefore is the key element in determining the overall profitability of the firm and how it is going to survive through the competition…
Pricing decisions therefore are critical in the sense that it can help organization to actually determine how much to produce and what level of units or quantities to target. Such importance of pricing therefore can allow an organization to actually determine the level of sales in units as well as in monetary terms the value required to reach a point where a firm starts to earn revenue. As such, there are different assumptions made by the firms to arrive at a price which is considered as just right. Further, the breakeven point is the beyond which a firm actually starts to make a profit. As such, it is important for our firm to first target that level of revenue and quantity which can bring us to the point beyond which we can start earning profit. To arrive at a price, there are different approaches which a firm can adapt actually to arrive at a right price. These approaches include demand-oriented, cost-oriented and competition oriented. (Phillips, 2006). Under these assumptions, a firm can actually take different perspectives to determine the price based upon typical factors faced by that firm. Since we will be in food business therefore our approach will be focused upon determining the right approach which can help us to set the right price. ...