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We've updated our privacy policy! Click here to read about it. MBA-Marketing Industrial Marketing
Pricingenvironment:Therelationshipbetweenbuyer, seller andcompetitorCharacteristics of Industrial Prices:
Morris has identified sevendistinguishing characteristics of Industrial prices.1. Price is not an independent variable. It is intertwined with product promotionand distribution strategies.2. The real price an industrial customer pays is quite different from the listprice; this is because of the factors like delivery and installation cost, trainingcost, discounts, financing cost, trade in allowances etc.
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MBA-Marketing Industrial Marketing3. By changing the quantity of goods & services provided by the seller,changing the premiums and discounts that are offered, changing the time andplace of payment and also in numerous other ways prices can be changed.Compare to product and distribution decisions, the decision regarding pricing ismore flexible.4. The complimentary and substitute product sold by the same company shouldbe considered at the time of deciding price for industrial goods.5. Prices can be resolved through negotiation in many a cases. In most of thecases the industrial prices are established by competitive bidding on a project byproject basis.6. Industrial buyers who are experienced and able to estimate the vendors’approximate production costs expect the increasing price to be justifiable on thebasis of either increasing cost or improvement in product. Hence, industrialpricing is often characterized by an emphasis on fairness.7. Industrial prices are affected by several economic factors such as