Price range: definition, purpose and types

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Price range: definition, purpose and types
Price range: definition, purpose and types

Price range is an indicator of the cost between the upper and lower limits for similar products for a certain period of time. All products that are closer to the lower price limit are of poor quality, according to the market understanding of consumers. Products that reach the top of the price range are perceived as good, but do not have sufficient turnover. This is due to the fact that the consumer considers the cost too high and is in no hurry to part with the money.

More definitions

Any product must be properly priced before entering the market. There is a certain price range for similar products. Based on its upper and lower indicators, you can set the final price for products. The main task is to take into account financially diverse segments of the population in the implementation of sales in the market. Also, for the calculation, you can use the opinion of the consumer on the price level for the category of goods. It is possible that these two methods can be used together.

Online store
Online store

As a rule, there are goods of different price ranges on the market at the same time. This makes it possible to meet the needs of different categories of the population as much as possible.

Analytics and forecasts

Sellers and buyers have an increased interest in such an indicator as the average price range of the market. Both of these groups need to make some kind of deal in which the final amount will suit both parties. It is also of interest to experts and market researchers. With the help of range indicators and direct consumer assessment, analytics and forecasts are built. A direct analysis of the levels of value is one of the priorities in such judgments.

It will take some research to determine the exact price range.

  1. Conduct price analysis for products in this category.
  2. Survey customers on the cost of a particular product.
  3. Combine the results of both tests.

Specific groups of levels are mainly used in setting a certain amount. It is important to consider that the psychology of the buyer is such that he always strives for a low price.

Buyer Satisfaction
Buyer Satisfaction

Determining acceptable value

The psychological component has one of the most important roles in such calculations. Consumer goods will be acceptable to the buyer at the same price that is already on the market. Higher figures will scare away the consumer. Offers that are not FMCG requiremore careful approach. Here it is worth considering the region and area where such products are located. It is also important to take into account the financial performance of various categories of people, to analyze the buyer's demand for similar products. An accurate study of each of these parameters will show the possible final cost of production.

Choosing the Right Price Range
Choosing the Right Price Range

After entering the market, companies can change their policy depending on changes in indicators in the price range for the goods produced.

Main types of value development

Analysis by range and price forecasts are carried out to understand the market: are there options to increase the cost, or is it worth lowering it. A drop or increase in demand for a product can give impetus to such actions. It can also include the constant price movement to one of the levels.


There are three main stages of value change:

  1. Original price. In other words, the point at which the commodity entered the trade. This indicator will be considered the lowest price level. It also takes into account the possibility of increasing to the maximum level for a good profit.
  2. Losses. In the range, one can single out the price indicator where sales were much lower than the rest. It is taken into account for the understanding of the buyer. It is also possible to extract such an indicator from further use.
  3. The closing point of the range. The price that brings the most profit and does not need to be changed at the moment. She will be considered the highestindicator.

Time gaps

Different trading systems are built on the closing point of the range. Proper price analysis can be a great clue to future price increases. This is readily used on exchanges and the Forex market.

The price range can be wide or narrow in terms of performance. The first option is a parameter of the main part of similar products for all time. Narrow - these are small intervals in terms of value for a given period of time. A wide price range is taken into account less often. However, it all depends on the specific situation. In different cases, it is necessary to determine which price range will be taken into account this time.

Variety of goods
Variety of goods

What affects the price movement

The whole market is usually divided into categories of goods. Each of them is designed for a specific group of people. There are also some concepts of product positioning. This allows you to more accurately understand what price should be set as the final one. There are some external and internal factors that influence the formation of value:

  1. The reasons and goals of the buyer, pursued when choosing a particular product.
  2. The income level of the consumer at which sales are calculated.
  3. Demand for goods.
  4. Prices from major competitors.
  5. Consumer morality and psychology in the right category.
  6. The influence of the norms and laws of the Russian Federation on the pricing of this product.
  7. Taxation.
  8. Current inflation rate in the country.
  9. Economicstate of the state.
  10. Indicators in the foreign exchange market.
  11. Foreign policy of the Russian Federation.
  12. Achieving advertising campaign goals and pricing correctly.
  13. Company trading plan.
  14. Accounting for expenses for the maintenance of the organization, the purchase of raw materials and so on.

Any product on the market, no matter what brand and manufacturer, is always designed to make a profit for the company. This is the main goal of any organization. Therefore, the correct approach to cost and determining the price range is an integral and one of the most important parts of the work before launching a product on the market.

Making a purchase in a store
Making a purchase in a store

The importance of understanding the trading situation

It is visual indicators that will help bring profit from production. Taking into account the opinion and demand of the buyer is essential for understanding the market for each product. The range of any product takes into account the psychology of the consumer.

You should also study in detail all types of such a definition as a price interval. Distinguish categories of goods and types of prices. Pay attention to inequalities in the financial performance of consumer groups. A detailed study of the customers targeted by the sale of the product will certainly have a good effect on the promotion of the company.

Many large organizations study and analyze the area of prices for their goods, create graphs accessible to ordinary citizens. In them, you can see both consumer demand and the results of surveys of the desired category of people.