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Asked a question 4 years ago

What is the importance of pricing?

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With pricing only, you can do the marketing and the whole selling procedure depends on pricing. Pricing decisions can be taken very carefully as it affects both demand and supply i.e buyer and seller. Pricing can never be too low or high. High price can shift the customers away from that product and low price can bring less revenue. Pricing affects the profitability of the firm as(profit = revenue - cost). It affects the demand of the product as price goes high, it's demand will eventually fall. You cannot measure a products quality in quantitative terms but you can fix it price as high price will be charged for the high quality goods. Pricing also helps in increasing promotion because expense incurred on promotion increase the price of the product.