Make marketing mix decisions - define the product, distribution, and promotional tactics.Estimate the demand curve - understand how quantity demanded varies with price.
Calculate cost - include fixed and variable costs associated with the product.
Understand environmental factors - evaluate likely competitor actions, understand legal constraints, etc.
Set pricing objectives - for example, profit maximization, revenue maximization, or price stabilization (status quo).
Determine pricing - using information collected in the above steps, select a pricing method, develop the pricing structure, and define discounts.
These steps are vital in understanding how you want to set your price, and at what times you need to change your prices on your product. Its a very thin line that can make or break your product and company if you happen to have your prices set too high or too low. In my opinion, this sole element could be what makes or breaks a company.You can have an excellent product, but if its priced too high, people wont buy it. On the same token, you can have an awesome product, but if its priced too low, not only may people not take it seriously, but you could be losing out on valuable revenue.
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