Podcast
Questions and Answers
What is the main intention of a business when offering products and services?
What is the main intention of a business when offering products and services?
Why is pricing considered tricky and challenging for marketers?
Why is pricing considered tricky and challenging for marketers?
What should be considered before determining the price of a product or service?
What should be considered before determining the price of a product or service?
What is the consequence of setting a price that is less than the total cost of production?
What is the consequence of setting a price that is less than the total cost of production?
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What is the relationship between the price set by a marketer and the customer's expectation of value and benefit?
What is the relationship between the price set by a marketer and the customer's expectation of value and benefit?
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What does the customer perceive as a fair price?
What does the customer perceive as a fair price?
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What is a crucial factor to include when setting a product's price?
What is a crucial factor to include when setting a product's price?
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Why is pricing considered challenging for marketers?
Why is pricing considered challenging for marketers?
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What is the consequence if a product's price is set lower than its total production cost?
What is the consequence if a product's price is set lower than its total production cost?
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What should a marketer prioritize when considering a price for their product?
What should a marketer prioritize when considering a price for their product?
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Study Notes
Importance of Price in Marketing
- Setting the right price for a product or service has far-reaching consequences.
- The price a marketer charges is a vital decision that affects business profitability.
Purpose of Setting a Price
- Businesses set prices to make a profit from their products or services.
- From the customer's perspective, they have a specific price in mind that they consider "fair and profitable".
- This price is related to the value or benefit the customer expects to derive from the product or service.
Challenges of Pricing
- Pricing is challenging for marketers due to the varying expectations of customers and businesses.
- The marketer must balance the business's need for profit with the customer's perception of "fair" value.
Factors to Consider when Setting a Price
- Total cost of production must be considered when determining the price of a product or service.
- It makes no business sense to set a price that is less than the cost of production, as this would result in a loss.
- A profitable price is one that is higher than the total cost of production.
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Description
Learn about the importance of pricing in marketing and how it affects business profits and customer expectations. Understand the role of pricing in the marketing mix and its far-reaching consequences.
