‘The art of marketing is the art of brand building. If you are not a brand, you are a commodity. Then price is everything and the low-cost producer is the only winner (Kotler)’. What is the one thing that people revolve their whole lives around? It is the object that people spend their childhoods educating themselves to obtain it. Every adult spends the entirety of life working for the sole purpose, which is to be able to live the lifestyle that they please. It is money. The question being asked is, “how is brand price determined”. Brand value is determined by supply and demand, where the brand is located, and marketing abilities. People work their whole lives to make money to buy life’s necessities and objects that we want. Few people ever wonder how companies determine the price at which they ask for their products.
There are various different points that factor into how brand price is determined. This paper will be going over just a few of them. One being the supply and demand curve, location of the business, and marketing. If you wish to find out the reasons to how much people are spending on the everyday items they buy, this will explain the major factors.
Some people have this idea, that companies determine brand price by just making one up one that they thinks works, but that is false because there are many different things that they have to go off of when choosing the right price. The first and arguably the biggest factor that goes into determining brand price is supply and demand, because it involves so many different factors. The supply is part is the amount of product or good that the company has available for purchasing by the consumers (Investopedia 2018). The supply can also be determined by in how much demand the product is in. Demand is the measure of how bad the customers are willing to pay for a certain price and also how much of the product is wanted (Investopedia 2018). “Supply and demand have an inverse relationship (Kramer 2018)”. That means and the demand rises, the supply will also rise, but that will cause the price to either the same or it will rise. If the demand of the product decreases or falls, the supply will also fall, causing the price to decrease trying to raise the demand back up (2018) .
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How a company utilizes marketing strategies and how they present their product also affect price greatly. Some of those strategies come down to just the basics like, brand name. A store’s perceived image is influenced by the store name and the quality of merchandise it carries (Grewal 2000)”. That is true because how catchy or clever the name is, is what drives the consumer to be attracted the product. This is something that happens subconsciously inside every person without trying. “The cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run (Thoreau, 1854)”. Something that goes along with this quote and the name is the design and quality of the product. The one thing everyone is looking for when buying a product is for it to be long lasting and durable(Grewal 2000). Another factor that goes into determining price is where the business is located. Depending on where it is located will fluctuate the demand on the product, because it can affect how much the consumers like the idea of the product or if it acceptable or part of the social trend (Johansson 1989).
Overall brand value is determined by supply and demand, where the brand is located, and marketing abilities. The overview of supply and demand is how much the consumers are either in need or want the product. Location is effective, because it is based off of locating in a place where the product will sell the best and where it is in need. Marketing strategies take into factor of what the consumers will find most appealing and which they are attracted to the most. To answer the question of what determines price, it is the pubic and consumers. The way businesses set their prices is how they can make the most money while still selling the most product.
