Marketing Functions

Factors Affecting Pricing Decisions

Pricing the product is one of the important element in marketing mix. Until recently it has been one of the most neglected areas. Even today, pricing in some firms is simply based on the concepts of cost, market position, competition and necessary profits.

Most important Factors affecting Pricing Decisions
  1. Objectives of the Business : There may be various objectives of the firm such as getting a reasonable rate of return, to capture the market, maintenance of control over sales and profits etc. A pricing policy thus, should be established only after proper consideration of the objectives of the firm.
  2. Cost of the Product: Cost and price of a product are closely related.
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Abey Francis

Different Types of Pricing Objectives

The task of the marketing manager is to decide the objectives of pricing before he determines the price itself. Pricing objectives provide guidance to decision makers in formulating price policies, planning pricing strategies and setting actual prices. The most important objective of the companies is to have maximum profits.

Pricing objectives are goals that describe what a firm wants to achieve through pricing. Pricing objectives must be stated explicitly, and the statement should include the time frame for accomplishing them. There are six stages of setting prices. They are developing pricing objective, assessing the target market’s evaluation of price, evaluating competitors’ prices, choosing a basis for pricing, selecting a pricing strategy, and determining a specific price.… Read the rest

Abey Francis

Marketing’s Impact on Individual Consumers and Society

Marketing is offering significant benefits to organizations and to society, while the fact that marketing is a business function operating in close contact with the public where extensive criticism is subjected to this functional area, some of this criticism is justified: much is not.

The function and practice of marketing has been criticized because it is claimed that it creates partial truths about products and services by emphasizing the gap between a person’s reality and their expectations in such a way that people feel lacking in either self esteem so that they feel compelled to close the gap by unnecessary spending.… Read the rest

Abey Francis

Levels of Products or Product Hierarchy

In planning market offering, the marketer needs to think through five levels of the product, each level adds more customer value, and the five levels constitute a customer value hierarchy. Each product is related to certain other products. The product hierarchy stretches from basic needs to particular items that satisfy those needs.

  1. Core Product – The most fundamental level is the core benefit. It is the fundamental benefit or service the customer is really buying. Marketers see themselves as benefit providers. E.g. A hotel guest is buying rest and sleep.
  2. Generic/Basic Product – At the second level the, marketer has to turn the core benefit into basic product.
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Abey Francis

Pricing Concept in Marketing Management

Price is one of the important variables in the marketing mix. Its importance has increased substantially over the years because of the environmental factors like recession, intensity in inter- firm rivalry and the customer becoming more aware of alternatives. Firms also have to educate customers on what to look for in the product & many of the buyers today use sophisticated methods in collecting information on suppliers just as the latter do. In order to arrive at the most acceptable price level, the marketer needs to have information on the three C’s– customers, competition & firm’s cost structure.… Read the rest

Abey Francis

Why Integrated Marketing Communication is Important?

For marketing communication to be successful, sound management decisions must be made in the other three areas of the marketing mix: the product, service or idea itself; the price at which the brand will be offered; and the places at or through which customers may purchase the brand. The best promotion cannot overcome poor product quality, inordinately high prices, or insufficient retail distribution.

Likewise, successful marketing communication relies on sound management decisions regarding the coordination of the various elements of the promotional mix. To this end, a new way of viewing marketing communication emerged in the 1990s. It is called integrated marketing communication; this perspective seeks to orchestrate the use of all forms of the promotional mix to reach customers at different levels in new and better ways.… Read the rest

Abey Francis