Someone has opined that, “the key to pricing is to build value into the product and price it accordingly.”. For example, in the yogurt category, each manufacturer carries several product lines differing in quality and price, but within each line there is an assortment of flavors that is uniformly priced. In simple words, pricing is the art of translating into quantitative terms the value of a product to customers at a point of time.
For Example, When You Look At A Car Brand, You Will See A Relation Between The Different Series And Their Prices.
According to philip kotler, a product line can be defined as “a group of products that are closely related because they function in a similar manner, and sold to the same customer groups, are marketed through these same types of outlets, fall within given price range.” A supplier might decide to a product suitable for all price levels, offering opportunities for a range of purchases. The budget for production according to the target price.
Since Firms Usually Develop Product Lines Rather Than Single Products, Product Line Pricing Plays A Decisive Role In Product Mix Pricing Strategies.
If you buy chocolate bars or potato chips (crisps) you expect to pay x for a single packet, although if you buy a family pack which is 5 times bigger, you expect to pay less than 5x the price. It’s virtually impossible to raise your price after the product has been released. You might also hear product line.
A Product Line Is A Group Of Products Within The Product Mix That Are Closely Related, Either Because They Function In A Similar Manner, Are Sold To The Same Customer Groups, Are Marketed Through The Same Types Of Outlets Or Fall Within Given Price Ranges.
It is a process that traders adopt to separate products in the same category into various price groups, to create different quality levels in the customers’ minds. Product line pricing involves the separation of goods and services into cost categories in order to create various perceived quality levels in the minds of consumers. There will be examples with each type of strategy.
An Organization, While Setting The Prices Of Its Products, Needs To Ensure That Prices Must Cover Costs Incurred For Producing Products And Profit Margins.
To better understand these product. You can always lower your price if need be. Product line pricing is more effective when there are ample price gaps between each category so that the consumer is well informed of the quality differentials.