2. Concept and Role of Pricing
Importance of Pricing in Marketing
Environmental Pressure on Pricing Decision
Objectives of Pricing
3. Price is the amount of money we must sacrifice to acquire
something we desire. It is the sum of values that customers
exchange for the benefits of having or using products or services.
A value that will purchase a
definite quantity, weight, size,
etc.
Price forms essential basis of
transactions • A buyer is willing to pay
• A seller is willing to
accept
• Value will be fixed by
bargaining
4. ChangeofPricing Change of quantity of money to be paid by
the buyer
Change of quantity of goods and services provided by
the seller
Changing of quality of goods and services provided
Changing the premiums or discounts to be applied for
quantity variations
Changing the time and place of transfer of ownership
Place and time of payment are changed
Changing the acceptable form of payment
5. Price System Allocates
Resources
• Prices determine
what products &
services should be
produced and in
what amount
• It determines how
products & services
produce
• For whom the
products & services
should be produced
Prices Affect Incomes
and Spending
Behavior
• It influences what to
buy & how much
• Profits are
determined by
revenues and costs
and revenues
determined by
multiplying price per
unit sold
Price Changes
influence in a Market
Economy
• When demand is
higher than supply,
buyers bid the price
up
• Higher price leads to
greater profits which
leads more
investment
• Higher prices
stimulate greater
rate of innovation
• Lower price leads
producers to convert
alternative uses
6. Allocates
Resources
• Prices determine what products & services should be
produced and in what amount
• It determines how products & services produce
• For whom the products & services should be produced
Affects Spending
Behavior
• It influences what to buy & how much
• Profits are determined by revenues and costs and
revenues determined by multiplying price per unit sold
Price is a
Promotional Tool
• Instrument of competition
• Enhance the image of product
• Key element of marketing mix
• Marketing is important than production
Price is Critical
• Inflation & Recession impact
• Government & Consumer force to maintain rules
7. Faster
Technological
Progress
• New product will not last long as new
• Urgency to recover the money invested in R& D
Proliferation of
New Products
• Customization and Customerization forced to provide
varieties and options
Increase Demand
for Services
• Increasing demand for supplementary services
Increased Foreign
Competition
• Making things different
The Changing Legal
Environment
• Increased number of compliance
Economic
Uncertainty
• Inflation
• Shortage of resources
• Recession
