Cheap or Expensive?
goods or services is said to cheap or expensive due to several factors including:
- Comparison between the price of goods or services with a sacrifice to make or obtain goods;
- Comparison between the prices of goods or services in a region with other areas;
- Comparison between the prices of goods or services in a store with another store;
- Purchasing power of goods or services.
For some goods, the value of the good determine with s sacrifice to make the good. for example if we make fried rice or nasi goreng in then Kaki Lima and need :
- a bowl of rice;
- margarine or cooking oil;
- seasoning or other flavour.
Comparison between the prices of goods or services in a region with other areas
Distance from place of production to the marketing cause additional costs in the form of the cost of transporting goods
This distance difference causes the difference in price in a region with other regions. for example the price of cement in Papua is more expensive than the price of cement in jakarta.
the six key variables customers consider when determining their "right price." thera are:
- Need: Is what you're offering a "nice to have" or a "need to have?" Necessities and luxuries each have an emotional quotient, but it's easier to trigger a purchase--often at a higher price--if the customer believes she needs what you're selling.
- Alternatives: What other products, solutions or services are available in the market to meet the customer's needs? There are almost always choices--even if they're not perceived as equal choices--including the decision not to purchase at all. You need to understand customers' views on what else exists in the market that meets their needs or a meaningful part of their needs, or that solves a particular problem. And remember that making no purchase is, in itself, a purchase decision.
- Perception of value: What worth does the customer assign to what you're offering? People assign value in a number of ways, such as whether it simplifies a complex task, makes an unpleasant one more delightful, brings added convenience or mitigates perceived risk. Value isn't about money; it's about how your product or service improves your customer's life.
- Suitability: Is your offering relevant to what the customer is looking for? Determine if what you plan to bring to market is on point, not beside the point.
- Credibility: Are you viewed as a viable contender in the market in which you plan to sell? If not, you'll have a much bigger hurdle than a better-known company, even if you have a superior solution. Credibility is especially challenging for new market entrants or for those that are well-known in one space but not in a new vertical they might want to enter.
- Performance: In short, how well does your offering do what it says it will do? Perceptions of quality are related directly to what the product or service is supposed to do, not just what it can do.