Price Setting as the Art of War Essay Example | Topics and Well Written Essays - 500 words

Price Setting as the Art of War - Essay Example Past historical data can provide insight into the willingness of people to pay more for an item. Take for example food items such as vegetables. The prices of vegetables fluctuate a lot due to supply and demand factors. If in the past customer was willing to pay $3 for a lettuce, then the company knows that it can increase its price to that threshold in the future. Past data has to be analyzed to determine how much volume of sales was generated at higher price points. Â  It is always a smart strategy to gain insight directly from the customers. The use of surveys can help a company determine if customers are willing to pay more for a good or service. The survey has to be well designed to include questions associated with the subject. For example, you can ask a customer if he is willing to pay more if the item the company sells increases in quality. Historical sales data can also be useful because they establish purchasing patterns. Â  The prices of sporting events in different spots vary depending on the team. For example, the New York Yankees can charge higher entrance prices than the Florida Marlins due to the fact that New York is a bigger marketplace. The record of the team also influences in the pricing for sporting events. Teams with winning records can charge more than the team with losing records. I consider pricing to be the art of diplomacy. Prices are set based on set variables such as quality, value, and marketplace. Items sold in flea markets are going to be cheaper than items sold at the mall. Â