What are the internal factors of service pricing?

What are the internal factors of service pricing: An organization’s pricing decision is influenced by various factors. Those are classified as internal and external factors. Internal factors are related to the formal organization. And the external factors are the organizational environment and information organization.

What are the internal factors of service pricing?

internal factors of service pricing

These are the pricing factors of the company. It is possible to manage construction and design by managing these factors. These are factors created by the company so they are under the control of the company.

1. Capacity

Processing of employee machine tools, proper use of the process, etc. will reduce the cost. An efficient organization can set low prices.

But still on profit if management is not efficient. And the use of old dated machine increased wastage it will increase the cost of the company.

2. Management policy

Management policy and mission also determine the cost of that service. Which provides the management to make decisions regarding the position of its company.

Some companies want to be value leaders. And others want to be economic leaders. The management decided the organizational chart number of the employees, work process, purchase policy, etc.

All and every decision management has a direct and indirect impact on cost. And the fee is eventually transferred to the cost of the prize.

3. Marketing objective

Pricing An organization’s decision is based on the company’s policy and its objectives. If the organization has selected its target market.

So the pricing would be pretty straightforward in a steady state. For example, if a hotel has focused on target budget.

So it will charge a lower price on the other hand if or the resort has positioned itself as a luxury with a focus on the deluxe tourist. So a higher price is needed to change this situation.

4. Marketing mix strategy

Price decisions should be coordinated with product design, distribution, and promotion decisions. For example, if a company producing a high-quality product produces a high-quality product. and uses a long distribution channel.

And organizes a high publicity company. So the price should be charged higher. Some tourism organizations follow a target price strategy to cover the highest cost.

Which is straightforward advertising to determine its selling price strategy. Which is not based on other marketing mixes. For example, national park entrance fees destination entry fees and visa fees from the government are not directly related to any other marketing mix.

Some companies use other marketing mix tools to create non-price post positioning in this method. The business organization considers another rewarding element. Then the other product is determined to determine the price.

5. Cost

Cost is the most important factor in determining the price of a product. This is the total expenditure of the company. All company expenses are required to be recovered by the award business organization.

Want to convert a price that covers all your costs in distributing the product. and delivery of a reasonable rate of return for the sale of the product and its return and risk will affect the company’s expense pattern.

Production Operating Costs Sales Costs Direct Costs and Indirect Costs Fixed Costs and Variable Costs Costs determine the break-even point cost and profit analysis.

Ending…

The marketing manager of a commercial organization needs to know Weasley. How costs vary at different levels of production. it’s not necessary.

Because the production volume is high, the cost of product processing, you need to buy an airplane for the additional guest of the TU center to provide some more space. To organize rafting for an additional customer need to add a hotel building.

Ask for the additional investment on the wrap Determine the organizational capacity city and service capacity of the employees. and calculate guest satisfaction or quality of service Non-profit organization resort and destination managers need to understand affordability.

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