Pricing Strategies: Understanding the Impact of Price on Marketing Mix and Customer Value, Apuntes de Marketing

¡Descarga Pricing Strategies: Understanding the Impact of Price on Marketing Mix and Customer Value y más Apuntes en PDF de Marketing solo en Docsity! TOPIC 7 – PRICING STRATEGIES MARKETING STRATEGY AND THE MARKETING MIX WHAT IS A PRICE? • In the narrowest sense, Price is the amount of money charged for a product or a service. • More broadly, price is the sum of all values that customers exchange for the benefits of having or using a product of a service. • Price has been the major factor affecting buyer choice although some other factors have gained increasing importance recently (ethical price, green behaviour, social aspects of consumption …) • Price is the only element of the marketing mix that returns money to the company, it is the easiest element to adjust and it also communicates the company’s value positioning. PRICE CHARACTERISTICS • It is the only element in the marketing mix that produces revenue, all of the others represent cost. • It is also one of the most flexible marketing mix elements as it can be changed quickly. • It is the number-one problem facing many marketing executives, and many companies do not handle pricing well. • Price also plays a key role in creating customer value and building customer relationships. CONSIDERATIONS AFFECTING PRICE DECISIONS • Setting the right price is one of the marketer’s most difficult task. Several factors come into play • The price the company charges has to be between the “ceiling” of one that is too high to produce any demand and “the floor” of one that is too low to produce a profit. COSTS • Costs set the floor on the prices the company can charge for its product. The company has to charge a price that covers its total unit costs of producing, distributing and selling the product. • Types of costs: • Fixed costs: do not vary with production or sales (salaries, rents, interests …)