ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Price mix

Updated on May 30, 2014

Introduction

Price mix includes :-

the study of pricing

importance of pricing

objectives of pricing

various factors influencing pricing

pricing methods and strategies

kinds of pricing and Pricing procedure.

Source

Price


Price is the key factor which besides the sale of the product on the important aspect in the marketing .The main objective of a firm i.e. to earn a profit, very much depends upon its price decision. The price level and sales volume together decide the revenue of . any business. As the sales volume in itself is ?ependent on price, pricing really becomes the key to the revenue of the business. Thus, pricing becomes crucial to profit as well. Pricing becomes a vital decision area on account of many other factors.

Pricing is the complex mechanism and. it is the measuring rod of the success firm more than one way. It is simultaneously a strategic element as it is related to the perception of quality and a major tactical variable, as it can be changed quickly for competitive purposes. Changes in price can be made much faster than changes in any other marketing mix variables.

To a buyer, price is the value placed on what is exchanged. Almost anything of value ideas, services, rights and goods can be assessed by a price because in our society the financial price is the measurement of value commonly used in exchanges. Financial price easily quantifies value and affords comparability for choos !lg products.

Economist defines "price as the exchange value of a product or service always expressed in money". The consumer answers the question (Is it worth it?) in terms of a familiar equation

i.e,:

Satisfaction = Benefits -cost

The price is the cost part of the equation. It indicates scarifies of purchasing power. When the bundle of benefits exceeds the price (cost), consumer gets real satisfaction When the price (cost) turns out higher than the expected benefits and uses, the consumer user has post-purchase dissatisfaction and repeat purchase is out of question.

Importance of pricing

Price is so essential for both the seller and the buyer. In the money economy there cannot be marketing without price. The price often article is its market of exchange value expressed in money. Either a buyer or a seller may propose a price in the form of a bid or an offer. In a competitive economy price is determined by free play of demand and supply. Price is the centre or focus around which our entire economic system revolves. tistakes on pricing decision seriously affect the firm. its growth, profits and future.

Price influence consumer purchase decisions. It reflects purchasing power of money. It can determine living standards. It regulates production, distribution and consumption of goods. It indicates recession or prosperity. It guides rent, wages, interest and profits. It governs optimum use of our scarce economic resources. Price is always an important consideration both to the buyer and the seller. It can often spell success or disaster to a firm.

Source

Pricing Objectives

Prices in markets are not carried in stone, they must be evaluated at regular intervals and adjusted if necessary. Similarly, pricing objectives may vary depending on the stage in the product life style.

Profit is one of the major objectives in pricing for any firms adopt profit optimization rather than profit maximization as the pricing objective.: usually, an optimum level of profits over a long period is considered as a more sound objective of pricing than maximum profits in the short-term. Obviously, 'optimum' is a vague term. Its distribution will vary from firm to firm. The firm must evolve a clear idea of the optimum from its perception of business realities and the standards it has set for itself.

A variety of objectives may guide pricing decisions:-

1. Profit Maximization

The important objective of the pricing decision is to maximize the profit of a fmn. Therefore pricing policy should be determined in such a way so that the company can earn the maximum profits. The pricing policy can be helpful only in the short period and the concern will lose its standing in the market very soon. Moreover, competitors will very soon oust him from the market. So. the pricing decision should be taken with a view to maximize the profits for long.

2. Stability of prices

Any organization or business firm adopt the stable price policy above can win the confidence of the buyers. It will also add to the good will of the firm. For this purpose, the organization should consider long run and short run elements.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)