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Hi Almuiz and Rasheed, I atually posted the question as a tricky one to aid learning of the group. Whilst all elements of the options have their role in determining the pricing strategy, the most important is the brand positioning. Marketing strategy and competitors prices comes next. Many marketers make this mistake, setting prices based on their marketing strategy without first predefining their positioning.
For me everything boils down to consumer, a pre launch market research is the only way out.. present your product to your consumer, conduct a research... their perception is what matters.. (although you cant just ignore other important factors i.e. Competitors and company objectives) but Consumer has the ultimate power. if they do not sound willing to pay premium there is no way you could force them to pay extra pennies for your products! i remember a lecture of Mr. Kotler where he stated the way volkswagen showen their product prior to the launch to the target customer and asked them how muhc will you pay for this Car? ..
I think it all depends in marketing strategy as it is definitely include all parameters such as competitors prices, profit drive or brand positioning.
On the Bases of how you will position your brand you decided your pricing strategy analyzing your competition pricing, decide your profit Margin and accordingly develop your marketing activities.
Hi Ekemini,
Pricing is a tricky business. You're certainly entitled to make a fair profit on your product, and even a substantial one if you create value for your customers. But remember, something is ultimately worth only what someone is willing to pay for it..
All the four parameter has its own importance based on the product or services one wants to create. For example: in case of High end premium product brand positioning will play an important role & in case of FMCG product pricing Competitors prices will take wider role in deciding the price of the product.
To my opinion, every parameter is important in determining the pricing strategy. you need to use it cleverly and should give priority as follows: a- Brand positioning, B- Marketing Strategy, C- Competitors Prices, D- Profit Drive
competitor prices and brand positioning
