Pricing

Fluctuations in the marketplace present formidable challenges to business and marketing. Globalization, accelerated social and demographic changes among customers, shifts in public policy, and rapid-fire technological advances have all made the marketplace for any firm a much more difficult place to do business.Of all the decisions made by management, pricing is undoubtedly the most visible, as well as the most vital, because of its direct impact on a firm's performance in the marketplace and overall level of profitability. Whatever the nature of the business, success is measured by the extent to which revenues from sales exceed the costs of committed resources. Ideally, the price or prices set for a product or service will ensure the highest margin consistent with volume considerations, recognize the customer evaluations of products and services, be responsive to competitive threats, and forestall competitive inroads.Hanna and Dodge here present an analysis of pricing policies and procedures which illuminates the myriad considerations involved in setting prices. The authors discuss such topics as ethics in pricing, psychological aspects of pricing, price theory, pricing and legal issues, cost-oriented pricing, demand-oriented pricing, product line pricing, geographic pricing practices, retail pricing, and the pricing of services.

Nessim Hanna is Professor of Marketing, Northern Illinois University.