Record into your notes.....and put the notes in your partner folder which should be organized and handed in at the end of this unit on price.
Price is the amount of money exchanged for a good or service. Price is the amount that consumers will be willing to pay for a product. Marketers must link the price to the product's real and perceived value, while also considering: supply costs, seasonal discounts, competitors' prices, and retail markup.
Price is, therefore, the element of the marketing mix that leads to revenues, unlike the other elements which incur costs. Pricing is also important as a strategic tool as it creates customer value.
The business model is a conceptual representation of the company’s revenue streams. Any significant changes in the price will affect the viability of the business model.
Pricing Objectives
Before deciding on a pricing strategy, a company needs to consider its pricing objectives. Pricing objectives should be aligned with the company's overall marketing or company objectives.
Some of the different types of pricing objectives may include:
Attracting new customers
Retaining existing customers
Preventing competitors from entering the market,
Preventing competitors from gaining market share,
Attracting customer attention to the release of a new product
Increasing sales of a specific product line.
What are the 4 types of pricing?
The four main types of pricing include:
- customer value-based pricing
- cost-based pricing
- competition-based pricing
- new product pricing strategies
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