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level: Level 2

Questions and Answers List

level questions: Level 2

Question	Answer
a passion of businessman to compete with other competitors especially invest with certain product to benefit the company and you. Have your own product and balance various factors in which no price weight attach, example product is perceive as good quality product so you will have to price your product as expensive o depending upon different factors and attributes of product. o Objectives in pricing is to optimize profit or losses or maintain market share at all cost	Pricing is an Art
guessing how market reacts to your price change	Pricing is considered a game
Pricing is considered a game:	1) Possible shifting to substitutes or shifting to competitor’s products 2) A price decrease may lead to increase demand: 3) End-users may eventually stop buying imported drug products after devaluation
WHAT ARE THE FACTORS INFLUENCING PRICE	1 THE MARKET FOR THE PRODUCT 2 COST OF THE PRODUCT
• A. The Market for the Product:	1. Market Appeal 2. Market Characteristics 3. Elasticity of Market demand 4. Expandability of market demand 5. Pattern of Income Distribution
1 – This includes attractiveness of the packaging that is appropriate for the consumers preference or at the point in sale. 2 – It is your product is either economically price or what benefits can you offer to your product	1 Market Appeal 2Market Characteristics
1 – Meaning if you lower the price, you can have more demand or if you increase the price, you can have less demand 2 – You can achieve this by implementing sales promotion or some advertising campaigns.	1 Elasticity of Market demand 2 Expandibility of market demand
Once the product is being created, then you have to identify what are the proper pricing for the specific product based on factors and also to whom the product is intended.	Pattern of Income Distribution
Pattern of Income Distribution	1 A. For affluent 2 B. For middle income 3 C. For poverty line (lower income market)
§ Usually intended for the manufacturing firm that makes their own product.	COST OF THE PRODUCT
COST OF THE PRODUCT LISTS:	1 Lower Production Costs 2 Higher Selling Cost 3 Joint Costs
o It can be achieved in different factors. For example: you have a better organizational capability or you have a lower procurement of raw materials components and highly able management. o You can lower your price by: for example, you may procure or you make your own raw materials and you don’t need to export which means you can lessen the pricing for your product. o For the resellers, if they can find wholesalers that offers a low price, then they can lower their price.	Lower Production Costs
It can be achieved if you have initiate massive advertising or personal selling and if the cost operation is also increases or if you have expanded your warehousing facilities or increase also in transportation cost.	Higher Selling Cost
Meaning the expenses on your own company will be shouldered by the customer. (For example: If you undergo expansion of your facilities, the cost there will be added to the price that the customer pays. Just like school facilities, if the school undergo expansion usually the additional fees are added to the tuition)	Joint Costs