Pricing is so important to marketing that it has been singled out as one of the four Ps in the marketing mix, along with product, place and promotion. Price is also a critical ingredient in consumer evaluations of the product. Therefore, we shall explore price as both an ingredient of the product and as a strategic marketing tool.
Pricing Objective. You can imagine that a firm may have several objectives in mind when setting a pricing strategy. When pricing Fiberrific, for example, we may want to promote the product’s image. If we priced it high and used the right promotion, maybe we could make it the Perrier of cereals. We also might price it high to achieve a certain profit objective. We could also price Fiberrific lower than competitors because we want poor people and older people to be able to afford this nutritional cereal. That is, we have some social or ethical goal in mind. Low pricing may also discourage competition because the profit potential would be less. A low price may also help us capture a larger share of the market. The point is that a firm may have several pricing strategies, and it must state these objectives clearly before developing an overall pricing strategy.
Another objective may be to avoid government investigation and control. Large, powerful firms cannot price their products so low that they drive out competitors, for fear of government interference. Note that a firm may have short-run objectives that differ greatly from long-run objectives. Both should be understood at the beginning and put into the strategic marketing plan. Pricing objectives should be influenced by other marketing decisions regarding product design, packaging, branding, and promotion. All these marketing decisions are interrelated.
Price Determination. We are so accustomed to thinking of pricing as something done by the seller that it is difficult to think of decisions coming from anyone other than the seller. But a moment’s reflection will show you that it is often the buyer who sets the price. For example, how many times have you told a seller that you would give him or her a certain amount of money for something? In the long run prices are determined by the interactions between buyers and sellers. People feel rather intuitively that the price charged for a product must bear some relation to the cost of producing the product. In fact, we would generally agree that prices are usually set somewhere above cost. But as we all see, prices and cost are not always related.
Cost-Based Pricing. Economists once felt there was a strong relationship between the cost of production and price. They felt that the price of a good was, and should be, based on the amount of labor needed to produce it. But it does not take much research to show just is not so. In fact, there is often very little correlation between the price of something aтв its cost of production (2413).
(Андреева Л. Л. Методические указания по развитию навыков чтения и устной речи на материале текстов по специальности для студентов ОЗО экономического факультета / Л. Л. Андреева.. – Ростов-на Дону, 2002. – с. 14-15)
Translate into English.
Дата добавления: 2015-04-20; просмотров: 93 | Поможем написать вашу работу | Нарушение авторских прав |