Price in Marketing
Price
Marketing is defined as the “activities that direct the flow of goods and services from producers to consumers” . The process of marketing involves planning and employing an array of methods known as the marketing mix (price, place, promotion, and product). An aspect of the marketing mix is price, which is the value received by a business in exchange for its goods . Pricing is thought to be the most crucial factor of marketing mix, as it is directly correlated with revenue and profitability . Therefore, one of the most significant marketing decisions a company has to make is establishing a solid pricing strategy.
Even though it may seem that price is only about a figure, it is a multidimensional subject that can make the difference between success and failure of an enterprise. There is a series of factors that determine the price of a product, most important of which is the balance between supply and demand, strong and effective competition or the lack of it, and production cost . Nevertheless, corporation’s pricing objectives such as premium, volume, and profitability pricing can influence the price of goods as well . Thus, it can be inferred that price is an element which fluctuates dynamically.
When it comes to setting a price for their merchandise, companies can choose from a considerable range of different pricing strategies. To illustrate one of the latter, penetration pricing is a pricing policy where initial profit is sacrificed in order to draw new clients and gain market share . A second pricing tactic is price skimming in which a high starting price is set by the retailer aiming at gaining maximum revenue, until competitive products appear leading to a price drop . Last but not least, there is competitive pricing which encompasses adjusting prices similar to what market leaders are charging .
One noteworthy example of successful pricing strategy that I can demonstrate is Apple’s approach. Apple has managed to become a firmly established
Marketing is defined as the “activities that direct the flow of goods and services from producers to consumers” . The process of marketing involves planning and employing an array of methods known as the marketing mix (price, place, promotion, and product). An aspect of the marketing mix is price, which is the value received by a business in exchange for its goods . Pricing is thought to be the most crucial factor of marketing mix, as it is directly correlated with revenue and profitability . Therefore, one of the most significant marketing decisions a company has to make is establishing a solid pricing strategy.
Even though it may seem that price is only about a figure, it is a multidimensional subject that can make the difference between success and failure of an enterprise. There is a series of factors that determine the price of a product, most important of which is the balance between supply and demand, strong and effective competition or the lack of it, and production cost . Nevertheless, corporation’s pricing objectives such as premium, volume, and profitability pricing can influence the price of goods as well . Thus, it can be inferred that price is an element which fluctuates dynamically.
When it comes to setting a price for their merchandise, companies can choose from a considerable range of different pricing strategies. To illustrate one of the latter, penetration pricing is a pricing policy where initial profit is sacrificed in order to draw new clients and gain market share . A second pricing tactic is price skimming in which a high starting price is set by the retailer aiming at gaining maximum revenue, until competitive products appear leading to a price drop . Last but not least, there is competitive pricing which encompasses adjusting prices similar to what market leaders are charging .
One noteworthy example of successful pricing strategy that I can demonstrate is Apple’s approach. Apple has managed to become a firmly established
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