Market price is the current price of a service or product. The market price is what is achieved when there is a balance between the forces of supply and demand. You must determine where supply and demand meet in order to set your price. This will allow you to test whether or not customers will purchase your product. [Hover Text: The minimum cost to retailers is your starting point for testing if your product can produce enough profit to be sold.
For a lot of people, understanding “what is retail marketing” is difficult. The basic concept behind market price is simple: it’s the current price that your potential customers are willing to pay. I know you’re probably asking, “but what if I can’t really measure what my customers are willing to pay?” Most companies have some sort of resource or location that they can use to test their product and see what customers are willing to pay. For example, you could gather all of the people who fit into the demographic you wish to sell your product to, and ask them what they would be willing to pay for your product in a survey, at a focus group, or in your store.
According to economic theory, there is a price at which the forces of supply and demand will meet. This price is called the market price. Economists and managers use market prices to evaluate changes in supply and demand in order to predict how things will work out in the future.
Setting pricing can be difficult. What if you charge too much? No one will buy your product. What if you charge too little, and others start to undercut your price? Well, then again, no one will buy your product. In order to set a price that will make customers want your card enough to reach into their wallets, while also leaving a profit for you, you need to determine market price. During the experiment phase of pricing, this is all we’ll be concerned with – how much money is my product worth to most people? How many of them would pay that money? Do I want to sell my product at this price? Remember: do what works for the customer. When done right, retail marketing and competition affect market prices and ultimately sales.
In order to answer the question of how to determine market price, you must first understand how the concept of supply and demand works. Simply put, when demand is high for a product or service (i.e., high customer interest) and there is enough supply available for that product or service, the price will stay steady at what is known as the market rate for said product or service. For example, if more customers want a certain book at a bookstore, but the store only has 15 copies left on its shelves, the store will charge higher prices for those 15 copies. In this case, the current market price of an otherwise average book is 1000 rs per copy. This value can help you determine how much money you should charge for your product if you plan to sell it in a retail setting like a bookstore.
