Pricing is considered as part of 4ps of marketing mix. While some lifecycles can be extremely short for example, the pet rocks, trolls, pogs, etc. There are many factors which affect price in international markets. A change in price not only directly affects revenue but has major consequences on other decisions. Pricing is a very critical decision in marketing management. Who determine the price structure of a product, top management, ceo, the entrepreneur, answer is no. The aim of this research was to know the influences of 7p marketing mix variables, which consists of product, price, promotion, place, people, physical evidence and process on purchasing decision of consumers in determining appropriate marketing strategy of. Pricing product is relatively considered better than pricing services.
After product, pricing plays a key role in the marketing mix. A company achieves the objective by price, which is one of the tools of marketing mix. Factors that affect pricing decisions 2012 book archive. Furthermore, the author describes the importance of pricing and describes it as the most flexible element of marketing mix, which can be changed quicker than other elements of marketing mix. Understanding the marketing mix concept 4ps cleverism. In short the decisions taken in respect of price affect other marketing mix variable decisions and so all of these decisions should be consistent with one another to make a marketing program effective. Considering the importance in seeing what things can affect the behavior of consumers in taking decisions in the rented vehicle. Price planning is the basic consideration in international marketing. Factors affecting pricing decisions business study notes.
These four marketing mix elements form the core of all marketing efforts. As well as taking into account traditional price considerations such as fixed and variable costs, competition and target groups click here for further information about marketing mix pricing an organisation needs to consider additional factor such as. This, therefore bring all the variables in the marketing mix to product, promotion, price and place distribution. If the company has already selected its target market and positioning attentively, then its marketing mix strategy, with price, will be comparatively straightforward. Factors that affect price in any market and pricing. In this article, we will look at 1 the four ps, 2 history of the marketing mix concept and terminology, 3 purpose of the marketing mix, 4 key features of the marketing mix, 5 developing a marketing mix, 6 key challenges, and 7 marketing mix example nivea the four ps product. Price planning involves decisions as to whether prices should be standardized, the levels at which they are set, the currency in which prices are quoted and terms of sales. How to set up an effective marketing mix pricing decisions the variables influencing product pricing the demand curve performing breakeven calculations marketing. Marketing mix strategy kotler 2003 identified the marketing mix is the set of selling tools for helping companies to aim the target customers in marketing. It is one variable that is very important to both seller and buyer. Basically, the elements for market mix decisions are the same for domestic marketing and international marketing. The relationship between marketing mix and customer.
Therefore, a marketer should adopt a wellplanned approach for pricing decisions. In determining a pricing policy, a company should not only consider the immediate effect of prices, but also give due weight to the reaction of competitors. Thus, the companys management and marketers invest a lot of time to establish pricing policies for international markets and customers. Marketing mix is a set of operational decisions regarding product, price, place, and promotion that are expected to be a simple thought in creating a marketing strategy sumarwan et al. Depending on the segment rich or poor, target customers. Pricing decision analysis the setting of a price for a product is one of the most important decisions and certainly one of the more complex. The product is either a tangible good or an intangible service that is seem to meet. The internal factors which affect pricing include organizational factors, marketing mix, production differentiation, the cost of a product and the objectives. Meaning of price price in the narrow sense is the amount of money charged for a product or service. The marketing mix is a set of four decisions which needs to be taken before launching any new product.
According to alexander 12, when travel agents sell a travel product to a customer, they will charge a percentage of the sales price as an agency commission. This then constitute the four ps to denote the four elements of the marketing mix. The marketing strategy helps you define, promote and distribute your product, and maintain a relationship with your customers. In terms of marketing mask kefir, marketing mix is one important element that is expected to have an influence towards consumer decisions. Therefore, cost is a major factor that will affect pricing decisions. Impact of marketing strategy on business performance a. Marketing mix can be called a set of tools intervention in the market horovitz, 2003. British journal of marketing studies published by european. This paper examines factors that affect pricing decision for export markets, and sheds light on international pricing strategies in a global competitive market. Pricing price is the only element in the marketing mix that creates sales revenue. These four variables help the firm in making strategic decisions necessary for the smooth running of any product organization. An examination of factors that affect pricing decisions for export markets.
On the other hand, if the price has to be skimming price, then promotions need to go up so that more customers can be attracted and brand equity can be built. Factors affecting pricing as noted, the main reason for entering different markets is to increase the income and profitability. Pricing decisions global marketing chapter 11 how to set price the global manager must develop systems and policies that address price floor. Moreover, the right decisions are well supported to. Factors that affect pricing strategies for international. Pdf an examination of factors that affect pricing decisions.
The marketing discipline is based on the marketing mix concept, which consists of the 4 ps. If your product or promotions change, price will change. The influence of marketing mix and perceived risk factors on. The factor of marketing mix including in the study were productsservices, price. Organizational factors refer to the internal arrangement or mechanism for decision making and its implementation. What are environmental factors that affect marketing decisions. As we know the marketing mix made up of product, price, place and promotion is the perfect combination of elements you need to get right for effective marketing. Price is one of the important elements of marketing mix. Overall marketing strategy, objectives, and the marketing mix internal factors affecting price decisions compare must decide its overall product marketing strategy before setting price pricing helps to accomplish company objectives.
What are the factors influencing pricing decisions in a market. In australia, joye and blayney 1990 found that product costs were of major importance in the pricing decisions of the majority of companies. A firm also has to look at a myriad of other factors before setting its prices. Elements of marketing mix product a product is anything that satisfies a consumer need. Pricing decisions pricing decisions objectives examine. An examination of factors that affect pricing decisions. Some factors are internal to organisation and, hence, controllable while other factors are external or environmental and are uncontrollable.
Price also happens to be a major element of the marketing mix. Pricing decisions objectives examine internal and external factors that affect pricing decisions and general pricing approaches. Figure2 shows the factors that affect the pricing decisions. The pricing objectives can be divided as short term objectives and long term objectives 1 short term pricing. The final price for a product may be influenced by many factors which can be categorized into two main groups. The influence of marketing mix and perceived risk factors on online purchase intentions yaty sulaiman1, maha mohammed yusr1, khairull anuar ismail1 1school of business management, college of business universiti utara malaysia sintok, kedah. Marketing objectives affect pricing decisions vtiger experts. The business should also keep its product as differentiated and set relatively high price for the uniqueness of its product.
Price is the firms tool for capturing value, and it affects to a great extent the wealth of the hotel and its patrons. In a broader sense it is the sum of all the value that consumers exchange for the benefits of having or using the product or service. Factors affecting international marketing strategies. A marketing manager should identify and study the relevant factors affecting the pricing. Marketing strategy based on marketing mix influence on. But the scope of decisions under these elements are different. The marketing activities also referred to as the marketing mix or the 4ps have a direct impact. The most wellknown marketing strategy tools are the 4 ps model. These variables are also known as the 4 ps of marketing or the product marketing mix. The current study seeks to examine the influence of marketing mix 4ps promotion, price, place and product on the efficiency of crm responsiveness, empathy, customer relations, assurance and. Price, product, promotion and place are the four ps of a. Factors affecting pricing decisions for the remainder of this tutorial, we look at factors affecting pricing decisions and how marketers set price.
Our study of how to set the best prices will take the marketing approach. Is the price competitive given local market conditions. This paper examined the basic factors that affect price in any market and the factors that influence channel structures and strategies, as well as the debate over standardisation and localisation of international advertising. When you are in the process of selecting the target markets, the marketing mix decisions must be evaluated. Factors are also classified in terms of competitionrelated factors, marketrelated factors.
Basically two factors, which affect the company price decision and strategy. Marketing mix refers to the set of controllable factors that a firm can use to influence the buyers response within a given marketing environment. Understand why companies must conduct research before setting prices in international markets. Therefore, product costs are very important to make a pricing decision. The marketer should know the factors that influence the pricing decisions before setting the price of a product. Pricing is a very critical decision in marketing management it is one variable that is very important to both seller and buyer.
Pricing product, external and internal factors affecting. Explain the factors that affect promotion mix or marketing. Most flexible marketing mix variable for marketers price is the most adjustable of all marketing decisions. Marketing objectives are internal factors that affect pricing decision. Kotler and armstrong 2006,also define place or distribution as a set of interdependent organizations involved in the process of making a product available for use or consumption by consumers. All products or services move through product lifecycles. The business should also keep its product as differentiated and set relatively high price for the. For example, when toyota developed its lexus brand to.
Marketing mix variables that affect pricing decisions marketing mix strategy from marketing 300 at sophia university. If price is lowered, for example, then sales is most likely to increase. This study attempts to analyze marketing mix factors influencing the purchase decision. Understand the factors that affect a firms pricing decisions. Reaction of competitors influence pricing decision.
The good distribution of product can effect positively on customer satisfaction. Marketing mix is the combination of different marketing decision variables used by a firm to market its goods and services. The researcher recommends that the companies should focus more on marketing orientated pricing and share it in the marketing strategy of the company. The goal of the marketing mix is to satisfy customers through offering the right product with the right promotion and place i. The reason for this importance is that where the rest of the elements of the marketing mix are cost generators, price is a source of income and profits.
Pricing, as part o f the marketing mix, is essentia l and has bee n always one of the most difficult dec isions in marketin g b ecause o f heightened co mpetition myers 1997, gray market act. Yaty sulaiman, school of business management, college of business. These should be clearly outlined in quantitative terms so as to be understood by all the members involved in pricing decisions. One of the key elements of a product, which enters in to a new market, is its price. Through pricing, the organization manages to support the cost of production. Pricing is one of the most important elements of the marketing mix, as it is the only element of the marketing mix, which generates a turnover for the organisation. Pricing, as part of the marketing mix, is essential and has been always one of the most difficult decisions in marketing because of heightened competition myers 1997, gray market activities assmus and. It is used to describe the combination of four inputs product, price, place, promotion which constitute the core of a companys marketing system. To ignore the outside factors is to set yourself up for failed marketing and lost revenue that can, in turn, affect the health of your entire brand. Pricing decision in the marketing mix business plan nigeria. The promotion has a very high level of impact to increase the sales of products. Unlike product and distribution decisions, which can take months or years to change, or some forms of promotion which can be time consuming to alter e.
Marketing mix professor jerome mccarthy marketing mix early 1960s proposed consisting of four main factors product, price, place and promotion that each of factors contains multiple activities. Factors are also classified in terms of competitionrelated factors. Marketing decisions must take into account these environmental factors to create an accurate picture of the marketplace and the companys standing within it. Learn vocabulary, terms, and more with flashcards, games, and other study tools. It should call for an effective market intelligence of the competitors pricing decision. These components are called marketing mix decision variables because a marketing manager can vary the type and amount of each element. An enormous number of factors affect pricing decisions. Aug 04, 2015 in short the decisions taken in respect of price affect other marketing mix variable decisions and so all of these decisions should be consistent with one another to make a marketing program effective. Pricing objectives refer to the targets to be achieved via pricing strategies in the marketing plan. The aim of this research was to know the influences of 7p marketing mix variables, which consists of product, price, promotion, place, people, physical evidence and process on purchasing decision of consumers in determining appropriate marketing strategy of malang apples at giant mog. Before setting price, the firm must decide on its price strategy for their goods.
Aug 07, 2014 after product, pricing plays a key role in the marketing mix. For instance, an organization has set a goal to produce quality products, thus, the prices will be set according to the quality of products. The marketers should set the prices as per the organizational goals. Managers must determine the objectives for the pricing objectives. Sep 06, 2018 pricing decisions are always tough and they are made tougher with a change in the marketing mix. Dec 07, 2019 the marketing mix is a set of four decisions which needs to be taken before launching any new product. Price is the only element of marketing mix that helps in generating income.
The items of marketing mix were measured on 5 point likert scale ranging from 1 strongly disagree to 5 strongly agree for assessing the marketing mix factor that affect the customers satisfaction. Pdf an examination of factors that affect pricing decisions for. Factors affecting the pricing decisions economics discussion. Thus, the very first thing which affects pricing is not marketing mix, it is segmentation, targeting and positioning. Factors to consider when pricing hotel rooms insights. The main objective of the firm, that is, to earn a profit very much depends upon the correct price decision. Marketing mix or 4 ps of marketing product marketingmix. Marketing mix variables that affect pricing decisions. Price pricing pricing on an international scale is a complex task. Factors that influence pricing decisions in todays global market place. Typically these lifecycles move through four stages. The company set high prices and provide high quality products in the market. This is because the marketing mix is decided as per the segment and the target you are going to have as well as the positioning you want to achieve. Through pricing, the organization manages to support the cost of production, the cost of distribution, and the cost of promotion.
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