Distinguish between at least two of the major factors that a

Distinguish between at least two of the major factors that are important when a company decides upon a price at which to sell its goods and services to the government. Provide a rationale for your response.

Solution

Among different factors on pricing strategy the major two factors are:

1: Demand curve: a lower price will increase demand and a higher price will reduce demand. At the same time there should be a threshold they should balance which is based on the competitors price. Track the demand change closely and maintain good relationship with government which helps them to win further more bids.

2:Value:This determines worth of the product.from the customer eye.. The valkue should significantly exceed the overall price.Along with value generated through the featires of nature of service company should consider th cost to serve the product into consideration and at any cost pricing should not be less than cost to serve which may results in loss to the comopany. Value of the product has some pshychological factors included from the customer point of view such as as ontime delivery, transparency in communication and way of overall interaction etc matters in business.