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Pricing and marketing. The pricing is a important factor in marketing both in getting the product accepted by the target market, and in generating sufficient revenue for the organisation.

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Introduction

PRICIN Student Name : - Rajaranga Rajaratnam Student ID : -39353 Module code : -BA 1002 Date of submission : -19-04-2010 CONTENTS PAGE 01-Introduction 02-Importance of pricing * Pricing objectives * Pricing prose * Influence on pricing 03- Factors that affect pricing 04- Impacts on an organisation's success INTRODUCTION The pricing is a factor of importance in marketing both in getting the product accepted by the target market, and in generating sufficient revenue for the organisation. This deal with the various elements that constitute the price of marketing-mix. This is the only element, which generates revenue when all the others talk about cost. Pricing is important in one more sense also. It is highly risk prone decision making area and a slightly wrong decision can hamper the revenue, growth and future of the company. However you may like a product; you cannot buy that if the price of the product makes it unaffordable. Hence, the companies must use pricing keeping in mind the customers they target at. The setting of the correct price is of enormous important as it is paid by the consumer, examines the economic determinants of price levels, looks at how organisations make decisions about what to charge, surveys the battleground for price wars, and explains why it is necessary for marketers to have a good understanding of company finance. We can define a price as that which people have to forego in order to acquire a product or service. The list of elements that might make up the price of a purchase is as follows: * Monetary price (including any discount offered) * Taxation (e.g. V AT) ...read more.

Middle

Therefore; a marketer should not only study the competitor's current pricing strategies. * Suppliers and buyers: Pricing decisions are directly affected by the approach of suppliers and buyers. For example:-If the prices of raw materials increase, the suppliers will shift the incidence of price rise to producers who, in turn pass it onto the customers. This is a serious situation which needs a detailed analysis by the marketers. Buyers also have a significant influence in the pricing decisions particularly under a market situation where the numbers of buyers is less but their share in a firm's sales is maximum. At the same time, scarcity and value of the raw material used also calls for proper attention from the management in pricing decisions. * Economic atmosphere: Pricing policies have to operate under a particular economic climate. The absence of competition allows firms to bag any amount for their products in the shape of high price. However; market response may not be the same in competitive conditions. Economic conditions should never be expected to remain in a stable state for a long period. Economic phases like inflation, stagflation, or recession have their say in the pricing decisions and, there for each phase. As a consequence, marketers have to anticipate future economic changes for pricing decisions. * Government control: In many countries prices of private firms are largely controlled by various Government legislations and acts to control markets. The impact of Government on pricing decisions is more pronounced in such industries where Government is the largest buyer of the production. ...read more.

Conclusion

Intensive distribution is usually required where customers have a range of acceptable brands to chose from. In other words, if one brand is not available, a customer will simply choose another. Selective distribution Involves a producer using a limited number of outlets in a geographical area to sell products. An advantage of this approach is that the producer can choose the most appropriate or best-performing outlets and focus effort (e.g. training) on them. Selective distribution works best when consumers are prepared to "shop around" - in other words - they have a preference for a particular brand or price and will search out the outlets that supply. Exclusive distribution It is an extreme form of selective distribution in which only one wholesaler, retailer or distributor is used in a specific geographical area. CONCLUSION The pricing is a important factor in marketing both in getting the product accepted by the target market, and in generating sufficient revenue for the organisation. This deal with the various elements that constitute the price of marketing-mix. This is the only element, which generates revenue when all the others talk about cost. Pricing is important in one more sense also. It is highly risk prone decision making area and a slightly wrong decision can hamper the revenue, growth and future of the company. However you may like a product; you cannot buy that if the price of the product makes it unaffordable. The price at which a product is offered for sale in the market is affected by several factors both internal and external. The companies must use pricing keeping in mind the customers they target at. ...read more.

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