Question

Street vendors sell various types of small goods. Often, there is a standard price posted for each item on sale. If the vendor really wants to sell an item, and determines that a prospective buyer is not willing to pay the posted price, he or she may engage the individual in a negotiation of the sale price. Sometimes referred to as dickering, the buyer and seller make offers back and forth until they can settle on a price that both believe is fair. 

1. Explain the type of pricing method involved. 

2. Describe the features of the pricing method involved.

Answer 1

1. Variable Pricing Method. 

2. Following are the main features of the Variable Pricing Method: 

(a) Paying capacity of the customers can be considered while selling. 

(b) Volume of the product purchased by the customer affect the pricing. Low price can be charged if volume of sale is more. 

(c) Bargaining power of the customers affects this type of pricing. 

(d) Acquaintance of the firms with the customers has an impact on the sale.