Pricing

Pricing is very important factor which affects consumer buying decisions. For elastic goods pricing is directly related to demand. For non-elastic product price effect is less. It is not just for earning profit margins. It is a strategy made by considering

• Market conditions
• Abilility to pay
• Target customers
• competitors
• trade margins
• total costs

Pricing also differs depending on the stage of product life cycle. These are different types of pricing depending on PLC.

For Zandu balm initially they launched only SKU's of 8ml and 25ml, then to enhance more market penetration they inroduced small SKU's like 1ml and 4.5ml. Th pricing is as follows

1ml - Rs2

4.5ml - Rs10

8ml - Rs28

25ml - Rs80

Competitors prices:

30ml - 65

55ml - 100

Instead of having premium pricing over its competitor Zandu balm has the highest market share because of the customer loyalty it earned over years. This is the psychological effect on pricing.