marketing64

‘Price is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service’                                (Kotler at al, 2008)

CHARACTERISTICS OF PRICE:
1.    Price is the only one of the ‘4Ps’ which generates income
2.    Customers can make inferences based on the price of a product
3.    Price is the value that customers give up or exchange to obtain a desired product
4.    It is flexible therefore it can be changed quickly
5.    Price decisions are coordinated with product design, distribution and promotional decisions to form an effective integrated marketing programme
6.    Pricing can also affect product positioning
7.    It can be used as a competitive tool 

PRICING OBJECTIVES:

-    Sales or Market Share Objectives

-    Profit Objectives

-    Competitive Effect Objectives

-    Customer Satisfaction Objectives

-    Image Enhancement Objectives

FACTORS AFFECTING PRICING DECISIONS:
There are a number of factors to be considered when setting prices and these can include internal and external factors.

INTERNAL FACTORS:

-    Marketing objectives   

-    Marketing mix strategy

-    Costs 

-    Organisational considerations

EXTERNAL FACTORS

-    The market and demand 

-    Competition 

-    Other external variables 

-    Customers