Channel Members
Each channel members seeks to play a significant role in setting prices in order to generate sales volume, obtain adequate profit margins, derive a suitable image, ensure repeat purchases and meet specific goals.
A manufacturer can gain greater control over price by using an exclusive distribution system.
A whole seller or retailer can gain stronger control over price by stressing its importance as a customer to the manufacturer.
To maximize channel member cooperation regarding price decisions, the manufacturer need to consider four factors
Channel member profit margins,
Price guarantees,
Special deals, and
The impact of price increases.
Economic conditions: The inflationary or deflationary tendency affects pricing. In recession period, the prices are reduced to a sizeable extent to maintain the level of turnover. On the other hand, the prices are increased in boom period to cover the increasing cost of production and distribution. To meet the changes in demand, price etc, several pricing decisions are available
Prices can be boosted to protect profits against rising cost,
Price protection system can be developed to link the price of delivery to current cost
Emphasis can be shifted from sales volume to profit margin and cost reduction etc.
Buyers The various consumers and businesses that buy a company's products or services may have an influence in the pricing decision. Their nature and behavior for the purchase of a particular product, brand or services etc, affect pricing when their member is large.
Government Price decision is also affected by the price controlled by government, through enactment of legislation, when it is thought proper to arrest the inflationary trend in prices of certain products.
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