BSM 200 Study Guide - Final Guide: Target Market, Oligopoly, Channel Aka
11 Apr 2015
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Price is another p in the marketing mix; best conceptualized as value for money. Deciding what price to charge is based on company objectives, customer preferences, company costs, type of competition, goals of channel members. To maximize profit often occurs with brand new product in a market with little competition e. g. introduction of flat screen tvs expensive but when competitors developed the same technology and could enter the market, the price went down. Flexibility can lower the price later easier than trying to raise price later. Price tends to be lower as the company"s objective is to sales volume, achieve rapid growth, discourage competition. See this in practice in end of season sales by retailers for cars, bbq equipment, clothes, furniture, etc. Sometimes pricing is used as a market position as a low price leader who will not be undersold. People want to be working to capacity, not over capacity.
