Introduction
The market principles are very complicated, but there are always rules according to which different generic marketing principles are formed. Pricing is one of the market principles, which is impossible to control absolutely (if it is not an absolute monopoly market) as there are always a lot of factors which influence the price construction. Samsung is one of the world famous brands, which offers its products according to the pricing policy which exists. The prices of the products are influenced by a lot of different factors, starting with direct and indirect costs and finishing with customer’s preferences and brand name.
Theoretical Foundations
In general, there are two main methods of pricing, which are used by all companies according to the basic article by Avlonitis and Indounas (2005). These methods of pricing are the cost-plus method and the pricing according to the market’s average prices. The names tell for themselves and these methods are the most convenient on the market price.
Research Findings
Samsung is the company which is famous for its electronic products, more over it is world brand, but the pricing policy of Samsung Company is influenced by other companies and the Samsung prices also influence the prices of other companies, as they are in constant interconnection. The example is the interconnection of Samsung and Sony prices may be suitable here. Samsung places the price of $150 for some item. Sony changes its price for $130 per unite. When Samsung changes its price, Sony will also make it higher. This is called the concept of maximization of profit (Jagpal & Jagpal, 2008, p. 377).
The other method, which is used by the Samsung Company, is the brand name usage. People mostly buy products of the companies with the brand name rather than the products of other unknown companies, especially in the field of electronics. People’s consideration is that brand companies can be trusted and the quality of them is higher. So, it may be said that brand name is one of the methods of companies’ pricing (McNeilly, 2008).
The customers’ likes and dislikes may also influence the pricing of Samsung Company as the named customer is customer led and the wishes and desires of the customers are followed. The customer interest in this or that model may be the factor whether to higher or lower the price, as well as to keep the price unchangeable (Kotler, 2006).
The main pricing method which is used by many companies, and Samsung Company is not the exception, is the quality characteristic products (Liegey & Shepler, 2000). The company takes into consideration the level of complexity while model manufacturing and its side appearance, that is the number of innovations which are inserted in the model. The new models cost higher as every innovation should be paid more, and when the model is for about half a year or a year old (we should not forget that we deal with electronics), so the price may be leveled to the cost-plus or according to the market’s average prices.
Conclusion
The pricing generic marketing principle of the market is one of the most flexible as it is closely connected with the manufacturing process and the economic relations with other countries. The innovations in this field occur frequently as the science develops and more and more new ideas are involved in the producing process. Samsung tries to provide such prices which could interest different layers of citizens, with different levels of income.
Reference List
- Avlonitis, G. J., & Indounas, K. A. (2005) ‘Pricing objectives and pricing methods in the services sector’, The Journal of Services Marketing, 19 (1), pp. 47–57.
- Jagpal, S, & Jagpal, S 2008, Fusion for Profit: How Marketing and Finance Can Work Together to Create Value, Oxford University Press
- Kotler, P, Pfoertsch, W, & Michi, I 2006, B2B brand management, Springer
- Liegey, PR, & Shepler, N 2000, Adjusting VCR Prices for Quality Change: A Study Using Hedonic Methods, Monthly Labor Review, vol. 122, no. 1.
- McNeilly, M 2008, George Washington and the art of business: leadership principles of America’s first commander-in-chief, Oxford University Press US