Public Policy Issues in Pricing

Abstract

Companies adopt pricing policies which maximize their revenues and profits generated. Sometimes, those pricing policies are not fair. The major public policy issues include unfair pricing practices within distribution channel levels such as price-fixing and predatory pricing, and across distribution channel levels such as retail price maintenance, deceptive pricing, and discriminatory pricing. Companies also set dynamic pricing. They set high prices for products to cover distribution costs, advertising and promotion costs, and excessive markups to generate extra revenues. Companies try adopting fair pricing policies. Laws and regulations are enforced to ensure it and that customers are benefited. However, sometimes it is difficult to ensure the legal and ethical aspects of pricing practices. Both governments and companies should be aware about the social goods used by customers and their pricing implications. Proper understanding and implementation of pricing policies will benefit both companies and customers and help in developing long-term customer relationships.