Marketing mix - price case study. L & C garage equipment services ltd. is a Sealey distributor. Sealey has a retail price which then L & C adds a 30% profit margin to. This is called cost plus pricing which is the most common form of pricing.

This shows that L & C garages prices are more considerable than his competition as this is why many of his customers choose to use his company rather than other e.g. Andrew Page ltd. But because Andrew Page is a better known brand people might choose to go to his company as they know quality will be assured, this means L & C will still lose customers even though their prices are cheaper. So they are not getting enough customers they would have liked when they dropped their prices, meaning that this strategy is not working out and they might need to change it. Or L & C could promote its cheaper prices but also getting the message across that quality is still assured with a good service and quick delivery. But as there is a recession on L & C might have thought the much affordable prices they have to offer will attract customers as everyone is looking for the best deal and once they have used their services then they will be satisfied and become a repeat customer. But as now we are coming out of the recession L & C could try penetration pricing, this is setting the price low to attract customers and when they have captured then they can put the price back up, but this can be costly because the customers might not be happy with the sudden change in price so therefore another method might work better. So according to this graph the customers consider L & C’s price in favour compared to its competitors so L * C could work on other areas at beating its competition this is called non price competition. L & C could work on becoming a bigger better well know brand than its competitors but this will take along time and determination if they are going to make it work. But if this works out then this could be a big benefit to the business and give the manager a big boost of confidence to expand the business.

this graphs shows that many customers believe that the price compared to its competitors is good. Price is one of the main reasons customers choose a business over another, as everyone is always looking for the best deal. If L & C carries on to beat its competitors with lower prices and attracting new customers, this can lead to potential growth, beating its competition and becoming a well know name. Pricing is important to customers and the business itself for many reasons. As price can be changed very rapidly. The flexibility of pricing decisions is particularly important in times when the marketer seeks to quickly stimulate demand or respond to competitor price actions. So if L & C’s competitor’s prices change in whatever way them L & C can easily adjust to that but this will come with consequences either way. But pricing decisions made hastily without sufficient research, analysis, and strategic evaluation can lead to the marketing organisation losing revenue. Prices set too high can also impact revenue as it prevents interested customers from purchasing the product. Setting the right price level often takes considerable market knowledge and, especially with new products, testing of different pricing options. So L & C has to make sure they have made the right decision and not set their prices to low to beat its competitors as it doesn’t want to put the question in customers mind of why the price is that low. Often customers' perception of a product is formed as soon as they learn the price.

L & C garages equipment services ltd. seems to be very successful when compared with competitors prices but price is not always why a customer chooses a business especially if there is not much difference. So even though the business might have competitive prices they might need to work on other aspects of the business to capture the market.