![]() Flexible prices are common in tailor-made industries as well as highly competitive markets.Especially if there is a significant time difference between production and delivery of a good and the entire process improves in the meantime, clients should be aware of the price fluctuation possibilities. In this case, sellers decide on price adjustments. When a manufacturer improves the production process by implementing technological solutions or improving the existing ones, the production costs will increase, which will affect the final price. In case the client insists on picking up the flower arrangement in person, the company can lower the final price. ![]() For example, a flower company charges a certain price per arrangement that includes delivery by default. Of course, such decisions are made based on thorough research and analysis of the target market.Īlso, there is room for a price adjustment when sellers are in a position to cut costs that don’t bring value to an individual client. When considering the perceived value of a good or service, sellers can decrease the prices of an overpriced product or increase the prices of products they consider valuable to their clients. For example, in raw material industries, the iron price will be lower when sold to the steel industry than to a bicycle chain manufacturer. Also, sellers set prices based on a segment. Prices will differ based on a country, sometimes even regions within one country. You have to know that behind this phenomenon is the flexible pricing strategy. We all compare prices from the country where we live to prices from foreign countries when we travel and very often we notice the difference. ![]() Also, the prices of a product may differ in different geographical locations. Whether it is an agreement established through negotiation or a personal assessment of the seller, prices can fluctuate. This pricing strategy allows retailers to set different prices for the same product depending on the customer. Yet, in most cases, it serves the management to simulate demand and bump prices up to increase profit or drop the prices to increase sales. In the case of flexible pricing, a final price is negotiable, meaning that sellers and consumers can discuss prices, to either lower them or push them up from the original price. Minimum Advertised Price (MAP monitoring)įlexible pricing is one of many pricing strategies that could be applied to setting up prices for goods and services.
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