Price as one of the 4 P's.

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Belkize Ismajli

        Task 12: Price

Price is another one of the 4P’s which is very important in marketing as most people cannot afford to buy anything no matter what the price is instead people’s decision on buying a product is usually if the price right and if they can afford it. For price businesses use different types of strategies to price their products, incorrect pricing leads to costumers not buying their products therefore will loose income and turn bankrupt if a sol trader like I am.

Price has always been a very important factor in the marketing mix but it’s even more vital in today’s competitive environment when businesses have to compete ruthlessly with their competitors. There are many factors that affect the price a business might charge. A business usually will look at its competitor’s prices and see what they are charging then they can price their according. Also for a new business like mine I’m going to keep in mind that I am a new company without a reputation so I must have low prices other wise consumers will prefer to go to a well known brand so I have to try and get consumers attention. Other factors include looking at supply and demand once they research this they have to choose their strategies depending on the time and product.

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There are seven main strategies I will be looking at and comparing which one is best for my business and when.

Penetration pricing: This is when a price is set low when the product is new to get consumers interested. When the price is below cost it’s called a lost leader. Once this product has become established the firm will increase the price. This happens with new consumer products where existing products have brand loyalty- e.g. magazines. I might use this method when I first set up as I will price my new products low to attract ...

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Here's what a star student thought of this essay

The spelling and grammar in this essay was perfect. The layout was good as each method was titled, so as to make it clear what each paragraph was about. This essay has received five stars as it answers the question well, with a good level of analysis.

The explanation in this essay is textbook, as in perfect. The author also uses good analysis when he/she explains which one they would use for their business and why. In business studies this is the easiest way of bring analysis into an essay, as you weigh up the pros and cons of each strategy. The level of explanation is improved further by the use of examples for instance the OAPs and Cost-Plus pricing. The essay could have been improved by the use of short conclusion, just to make it clear which strategy they would use.

This essay clearly answers the question well, by describing what price is and how it relates to the four Ps. They also take the response to another level by explaining types of pricing strategy. The author also helps to make it clear to the author what they are doing: ‘There are seven main strategies I will be looking at and comparing which one is best for my business and when.’ This is a good thing to do in any essay, as it lets the reader know what you are going to do.