COMPUTER MARKET

Computer Market

Computer Market

The free market is one in which producers are free enter and exist. Free market is a modern concept that facilities buyers and sellers by limiting their restrictions. The advantage of free market for consumers is that they can get products at inexpensive prices. The free market is characterized with intense competition that results in price reduction. In the computer industry, manufacturers are facing the challenge of technology advancements. However, the technological advancements do not allow producers to increase the price of their product because the technology becomes obsolete quickly.

Product price is an important element of purchase decision as well as of marketing mix. In developing countries where prices of products form a large role in influencing the consumers, price is prevailing among other elements of marketing mix which are product, promotions and distribution. Before setting the prices of product, there are various factors that must be considered by marketers, the most important among them is enviornmental factors which includes competition. From the viewpoint of competition, the firms must consider the impact of their pricing strategies on the prices of competitiors or they must set prices keeping in mind the strategies of competitors. There are different pricing strategies which includes skimming pricing and market penetration prices. In skimming strategy, firm set the higher prices of their product and target to those consumers who are price sensitive. In penetration strategy, firms choose the lower prices for their product to penetrate in to the market and target to those consumers who are price sensitive. The normal price at which the product is offered is list price however companies offer different discounts such as quantity discounts, seasonal discounts, trade discounts.

Price elasticity is another dimension which can affect the purchase decision. Price elasticity of demand is defined as the percentage change in quantity demanded as a result of one percent change in price. Price elasticity is the measure of relative change in the demand of the product due to change in the price. When the product has an elastic demand, consumer's pricing decision will be more affected by the change in price where as if the product is inelastic, the response would be less. Usually price is the useful element on the basis of which consumers make expectations about the purchase of a product. Manufacturer and retailer also want to make price policies in a manner so that they can achieve increase sales level of their product. Due to the reduction in the price consumer can buy more of the product, although these are usual effects, they will depend on the products and brands presented to such fluctuations. By analyzing the ups and down in the price of the products, it can be determined that to which extent the demand of the product is changed due to the fluctuation in the price of products and brands. Consumer is very sensitive to the price of the product. This condition of individual sensitivity can analyze through series of factors like market share, level ...