How do you think marketing managers choose the appropriate price for a product? What factors do they take into consideration when setting a price?
I believe that the first step in choosing a price is figuring out the minimum price the product must be sold at to make a profit. Therefore, the managers must take into account the price that it costs to product each product, as well as figuring out what the break-even point is. They must then take into account the external environmental factors and find out what customers are willing to pay for similar products. I believe that they also must take into account how much profit they are looking to make. After all of these factors are taken into account, they may then be able to distinguish an appropriate price for the product.
If it product is priced too highly then the product won't sell. On the other hand, if the product is priced too low than there won't be much of a profit, it any, made of the product. Therefore, the price must be set appropriately.
What are some products that have failed because of an inappropriate price point?