Pricing Analysis for Shop Niche Essay Sample

Pricing analysis for Shop Niche
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Price Analysis
Price analysis is the fixing of prices of goods without consideration of their costs or profits. It is the main method used in a competitive market with competitive goods. The price is set based on the demand and supply of the goods and the price fixed by most suppliers. Price analysis best fits a market that has the product or complementary products. In most tenders, this is the strategy used since the goods in question are in the market, and the bidder who sets the lowest price then wins.
Methods of Price Setting and Analysis
Price analysis comprises analyzing existing price history, comparing competitive bids, comparing with a published price list, and setting government prices. Analysis of existing price history helps determine the possible price of a good by comparing the price with historical prices of the same good. Where a product has no price history, then it uses the prices of complementary goods; this is when the product is new in the market. Comparing competitive bids is competitive pricing. It involves asking the price of a similar good from other suppliers (Carson, Gilmore, Cummins, O’Donnell, & Grant, 1998). It requires consideration of the actual cost of acquisition to ensure the price set is competitive and affordable. Comparison of published prices mainly applies to manufacturers. The pricing strategy requires manufacturers to consider the discount offered to customers and retailers; it best suits a market with similar goods and services provided to the general public. Government prices set for an item are also called price controls, where the government and other authorities take control and determine a range or specific price of a product. It prevents customers from being overcharged. For example, the price control for rent in the United States has helped in providing affordable housing.
Pricing Objectives
Pricing of goods is critical. The price set should attract many customers since the business will begin running at a loss. However, the price should not be high to prevent chase customers away. The business, especially in its first year, should aim at boosting its customers, making profits, and setting a break even' which may be challenging (Avlonitis & Indounas, 2005). The main objective of pricing strategies is to ensure the expansion of businesses and making profits. Shop Niche aims at attracting its customers by offering coupons. It states that its wholesalers will give them 25 cents that should be issued to the customers. Handling of items will also attract 8 cents that the wholesaler will issue to Shop Niche. The business will probably consider changing their prices due to the discounts of 5% they will receive above their average purchase units. A 10% will also be issued regarding the units, and manufacturers will also provide transportation. Businesses have different pricing objectives, and they guide on the cost of the product. An appropriate pricing objective should reflect a good company's marketing, financial, strategic, goals, and customer price expectations.
The pricing objectives of a business determine its pricing strategy. Shop Niche's aim objective is makin...