The Marketing Mix: Price

The Marketing Mix: Price

The marketing mix: price

The only element to product revenue in the marketing mix is price; all the others such as promotion, packaging and product represent costs to the company. Price of a product depends on the cost associated with the product (Chen, 2009). If the cost, for producing the product increases the price of the product tends to increase. With intense competition, pricing is a major issue concerning marketers nowadays.

Pricing

One of the most significant parts of effective marketing is right pricing of the products. Among all other parts of the marketing mix, it is the only part through which revenues are generated. It is the variable in the market that can be changed, as competitors price change. In simple words, the amount of money through which goods can be bought or sale is called price. Price can express the financial value of the product. Price is the most noticeable indicator of cost for consumers; therefore right pricing of a product is very important. Pricing is interlinked with the product positioning. For determining pricing of a new product following steps can be followed:

Develop a marketing strategy and make marketing mix decisions

Set pricing objectives and determine pricing

Loss of sales for the organization can be caused by pricing the product too high or too low. There are many pricing strategies that can be implemented by organizations.

Costs

It is important for a company to know the profitability of a product when it is preparing the feasibility for it. The company should calculate all the costs associated with the production of the product and the approximate orders that the company will make in order to have a break even. Finally, the price should be determined after taking all the costs into account (Chen, 2009).

Price Setting

Price setting is the procedure of coming up with a cost to customers of a service or good produced by a business. The process of price setting for goods and service is often influenced that it helps in promoting the product. Although, the product's price level is usually based on its distribution costs and production, as well as the product's value perceived by the targeted customers.

In order to determine and set the right price for the selected product, the first thing that I will do is to study where the competing products are priced. Secondly, I will set the prices of the product ...