Using the company that you chose in Week 4, complete the following tasks: Review the feedback from the week 6, 7 and 8 assignments and make the necessary improvements and re-submit as part of the Sign

MARKETING 0

Bruna Spera Martins

Southern States University

BU534 – International Marketing

Instructor: Dr. Peggy Bilbruck

Environmental influences refer to external factors that impact an organization's marketing decisions involving pricing. Having a pricing goal is not sufficient; an organization must consider many other factors before setting its product prices. Customers are a crucial consideration when making a pricing decision. The three vital elements for consideration about customers are whether they feel that the product provides value, how sensitive the buyers are to prices changes, the number of buyers available. The company needs to collect market size data and try to identify how sensitive customers are on price. The product's price should match the buyers' perception of the value they are likely to get from the product (Zhou, 2019). The number of buyers able and willing to buy the product, determine the demand of the product, and due to forces of demand and supply, it influences the product price. When the demand is high, the company can set relatively high prices.

The way competitors sell and price their products has a great impact on the pricing decision of a company. If a customer wants to buy a pair of sneakers from Gucci Company, but the price 20% less in another competing company, the customer is more likely to buy the product from the competitor. Companies should consider matching their prices to that of the competitors to establish and maintain their loyal clients to avoid this problem, which may cost the company its market share. When the competition is too high, the company may also consider giving an extra discount if the customers feel the prices may be better somewhere else. The presence of substitute commodities impacts the pricing decision of a company as well (Kim, 2019) If the prices of certain products become too high, the customers may look for a substitute that solves the same problem. High completion also means and the company should invest more in advertising.

The economic forces impact the product pricing decision. The economic environment factors like unemployment levels and interest rates impact the price. When the level of unemployment is very high, many people will have lower bargaining power due to low income, which results in reduced demand for the product, the lower the demand, the lower the price. When interest rates are very high, the company is likely to increase the prices of a product to compensate for the interests. The rate of currency exchange in the international market also influences the product pricing.

Federal and state regulations and laws determine the prices of products. The state regulations are designed to promote competition, encourage fair and ethical business behavior, and protect consumers from exploitation. Some regulations limit the ability and freedom of sellers to charge differently for the same commodity. Such regulations may serve to protect small companies from the big ones that have the ability to give big discounts and eliminate the small competitors. The state may set maximum prices for some products above, which no company is supposed to sell. Governments may set taxes and custom duties that influence the pricing decision as the company must find a way to compensate for extra expenses brought by the tax addition.

Changes in customers' tastes and preferences may affect the marketing and pricing decision of a company. Change of people's social behavior and other factors may impact them to shift preference on certain products affecting the demand and thus, leading to low prices.

Conclusively, a company has to consider several factors when setting pricing and marketing objectives. These influencers may include the completion, customers, government policies and regulations, economic forces, and changing buyers' preferences and tastes on products.

Reference

Kim, J. (2019). The impact of different price promotions on customer retention. Journal of Retailing and Consumer Services, 46, 95-102.

Zhou, J., Zhao, R., & Wang, W. (2019). Pricing decision of a manufacturer in a dual-channel supply chain with asymmetric information. European Journal of Operational Research, 278(3), 809-820.