Successfully reported this slideshow.
Your SlideShare is downloading. ×

Marketing Unit3.ppt

Ad
Ad
Ad
Ad
Ad
Ad
Ad
Ad
Ad
Ad
Ad
Loading in …3
×

Check these out next

1 of 18 Ad
Advertisement

More Related Content

Recently uploaded (20)

Advertisement

Marketing Unit3.ppt

  1. 1. SRM INSTITUTE OF SCIENCE AND TECHNOLOGY DEPARTMENT OF COMMERCE CLASS : I BCOM CS COURSE CODE : UCC20S02T COURSE NAME : MARKETING
  2. 2.  “Price is the exchange value of goods and service in terms of money”. Setting the right price is an important part of effective marketing. It is the only part of the marketing mix that generate revenue (product, promotion, and place are all about marketing costs).Price is also the marketing variable that can be changed most quickly, perhaps in response to a competitor price change.  Put simply, Price is the amount of money or goods for which a thing is bought or sold. The price of a product may be seen at a financial expression of the value of that product.  For a consumer, price is the monetary expression of the value to be enjoyed/ benefits of purchasing product, as compared with other available items.
  3. 3.  Without price there is no marketing, in the society, It money is not there, exchange of goods can be undertaken, but without price. That is there is no exchange value of a product or service agreed upon in a market transaction is the key factors which affect the sales operations.  Price is important economic regulator.  Can decide the success or failure of a firm.  The marketing demand for a product or service to a large extent depends upon the price of the product.  Price will affect the competitive position and share of the market.  Price is always an important consideration both to the buyer and seller.
  4. 4.  To maximize the profits  Price Stability  Competitive situation  Achieving a Target-return  Ability to pay  Long-run Welfare of the firm
  5. 5.  Economic factors Consumer demand, competition, political consequences, legal aspects, ethical aspects.  Internal factors Costs Business objectives Return on investment Market share Preventing competition Meeting competition Stability in price Maximizing profits
  6. 6.  External Factors Demand Competition Middlemen Government regulations Political conditions
  7. 7.  Cost price is the total amount of money that it costs a manufacturer to produce a given product or provide a given service.  A cost price includes all outlays that are required for production, including property costs, materials, power, research and development, testing, worker wages and anything else that must be paid for. The manufacturer must calculate a product’s cost price carefully to avoid taking a loss on sales or not being profitable enough. Scrupulous accounting and careful deliberations are required to set subsequent prices realistically. A sum for contingency may also be included in the cost price, given the difficulty of ensuring that all costs are accounted for.
  8. 8.  Cost price, along with the profit margin, determines a product’s wholesale price. Between the manufacturer’s suggested retail price (MSRP) and the wholesale price, there is generally room for profit for both distributors and retailers. However, manufacturers occasionally offer a product at cost or even below cost – forgoing their profit – as a special incentive or a means of dealing with unforeseen circumstances, such as unfavorable market environments.  Cost price is often considered sensitive information that the manufacturer wants to protect from both customers and competitors.
  9. 9. NATURE OF THE MARKET AND DEMAND  Market demand is the total amount of goods and services that all consumers are willing and able to purchase at a specific price in a marketplace. In other words, it represents how much consumers can and will buy from suppliers at a given price level in a market. 
  10. 10. COMPETITION Competition is the rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market share growth. Market competition motivates companies to increase sales volume by utilizing the four components of the marketing mix, also referred to as the four P's. These P's stand for product, place, promotion, and price. Knowing and understanding your competition is a critical step in designing a successful marketing strategy. If you are not aware of who the competition is and knowledgeable about their strengths and weaknesses, it's likely that another firm could enter the picture and provide a competitive advantage, such as product offerings at lower prices or value added benefits. Identifying your competition and staying informed about their products and services is the key to remaining competitive in the market and is crucial to the survival of any business.
  11. 11.  Willingness to pay or WTP is the maximum amount of money a consumer is inclined or willing to spend on a commodity. This amount can never be expressed in exact numbers as all the consumers will never have the same willingness to pay.  In other words, the willingness to pay keeps on fluctuating depending on certain factors. So, it is generally measured as a range. Willingness to pay gives an idea of the aggregate demand for a particular period.
  12. 12.  Willingness to accept is the minimum amount at which sellers sell their commodity. Contrary to this, the Willingness to Pay is the maximum price consumers would pay to buy the item.
  13. 13.  What makes your product or service different and more appealing to customers than other options in your category. Product differentiation is what gives you a competitive advantage in your market. Product differentiators can include better quality and service as well as unique features and benefits.
  14. 14.  Management of the 4-P’s of marketing (marketing mix) is the mandate of a marketing manager in firm. A marketing manager therefore analyzes the market, plans for the future, develops marketing strategies, and meets market needs and desires. The marketing plan identifies all controllable elements of the exchange relationship between an organization and its customers. The 4-Ps are considered controllable since they represent the key inputs into a marketing manager’s plan. Such inputs may entail budgetary allocation, human and physical resources.
  15. 15.  Regardless of the pricing strategy a company ultimately selects, it is important to do a break-even analysis beforehand. Marketers need to understand break-even analysis because it helps them choose the best pricing strategy and make smart decisions about the short- and long-term profitability of the product.  The break-even price is the price that will produce enough revenue to cover all costs at a given level of production. At the break-even point, there is neither profit nor loss. A company may choose to price its product below the break- even point, but we’ll discuss the different pricing strategies that might favor this option later in the module. Formula in rupees: Break-Even Price = Costs / Units In units : Break-Even Quantity (in terms of units) = Costs / Price
  16. 16.  Cost-plus pricing, also called markup pricing, is the practice by a company of determining the cost of the product to the company and then adding a percentage on top of that price to determine the selling price to the customer.  Cost-plus pricing is a very simple cost-based pricing strategy for setting the prices of goods and services. With cost-plus pricing you first add the direct material cost, the direct labor cost, and overhead to determine what it costs the company to offer the product or service. A markup percentage is added to the total cost to determine the selling price. This markup percentage is profit. Thus, you need to start out with a solid and accurate understanding of all the business' costs and where those costs are coming from.  In certain cases, the markup percentage is agreed upon by both buyer and seller. This percentage can also serve as a bargaining chip during the sale.

×