Read through the below post and provide any on of the following: APA format 250 Words.

Read through the below post and provide any on of the following: APA format 250 Words.

.Ask a probing question, substantiated with additional background information, evidence or research.  

· Share an insight from having read your colleagues’ postings, synthesizing the information to provide new perspectives.  

· Offer and support an alternative perspective using readings from the classroom or from your own research.  

· Validate an idea with your own experience and additional research. 

· Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.

Post:

Which is more detrimental to a firm, pricing your product or service too high, or pricing your product or service too low?

Pricing of a product is a very important component that determines the success of a product. Price is the amount the end user is expected to pay for procuring the product. Price is often linked to the perceived value of the product. If the price of the product is marked too high, it may lead to decrease in the sales of the product. Other way around, if the price of the product is marked too low, it may lead to undermining the value of the product. So pricing the product at the right price is very important for success of the product.

Marking the product or service high may be tricky in many ways. 

Firstly, it may lead to customers looking for alternative products which are potentially cheaper than the offered product. 

Secondly, higher prices may lead to non-availability to those customers with low purchasing power, thus eliminating a complete class of the society of people.

Thirdly, higher prices will impact the broader reach of the commodity to the people. Higher priced products will be restricted to certain borders of the country.

All the above will lead to decrease in the sales of the product and potentially decrease the profit on that particular product for the company.

Marking a price lower also has its own share of drawbacks. 

Firstly, lowering the price of a product might result in having a presumption that the product or service if of lower quality.

Secondly, it becomes difficult to increase the prices in future if the cost of producing the product goes up.

Thirdly, a low-priced product will lead to difficulty in making profit for the company or will take time to make profit for the company. 

So, from the above it can be inferred that a low-priced product may impact the profit making of the company in multiple ways. 

It is very essential for a company to have the right price set for the product. Effective pricing will account for more than 50% of the product sales for the company. 

References:

Nagle, T. T., & Müller, G. (2017). The strategy and tactics of pricing: A guide to growing more profitably. Routledge.

 Patrick Campbell, 20016. The Importance of Value-Based Pricing Strategy and Why You’re Likely Selling Your Products Short. Retrieved from: https://www.bigcommerce.com/blog/value-based-ecommerce-pricing-strategy/