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Problems of Fair pricing
Transcript of Problems of Fair pricing
Determining a Fair Price
Man is entitled to enjoy the fruits of his labor and as an effects sets a price he deems reasonable for his produce.
Theory two advocates that price depends on the law of supply and demand and fair is that the one obtained by a fair competition.
takes place in an open market where price is fair when it tends to reach the lowest point possible due to strict competition
Factors to be considered
the cost of materials
operating and marketing expenses
reasonable profit margin
Ethical Issues in fair Price
True cost of the product is concealed.
Some companies normally do not show the real cost of the product with a closed book policy or under the clout of confidentiality
suggested retail price
The impact on the consumers of a suggested retail price is one that is open to a slot of interpretations making price determination subject to doubt and suspicion.
Use of electronic scanners
Just or unjust Price
The use of electronic scanners in grocery or departments is not a full proof method for pricing fairly .
It is subject to manipulation and system failure.
Promo prices such as "SALE" items manipulate consumers in buying products that are thought to be cheaper
Follow the leader pricing
Follow the leader pricing is done to purposely make the buyers believe that what is being sold is the same as the well-known brand
Price gouging takes advantage of an economic situation.
An example is pricing canned goods higher during storms and natural calamities
Price fixing uses the power of the retailer among the producers correspondingly controlling product price