BHM 206 PRINCIPLES OF MARKETING

Avoid a situation where the product has to compete

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avoid a situation where the product has to compete only on the basis of price. Pricing is an important element of the marketing mix. Pricing is affected not only by the cost of manufacturing the product, but also by: (i) the company’s objectives in relation to market share and sales (ii) the nature and intensity of competition (iii) stage of the product life-cycle at which the product is currently positioned (iv) nature of product whether as consumer or industrial product, and if the former, whether it is a luxury or necessity. Before making any pricing decision it is important to understand all these factors. There are various methods of pricing. The four most commonly used methods are full cost pricing, pricing for rate of return, going rate pricing, and customary pricing. While the first two methods are based on the costs incurred, the latter methods are based on the competition’s pricing. While from the company’s point of view, price represents a kind of ‘maximum’ that it can charge given its own costs and nature of competition, from the costumer’s viewpoint it is a representation of quality of the product. 4.0 CONCLUSION Pricing policies are considered one of the most marketing mix elements. The psychological pricing affects mainly from one consumer, to another. The importance attached to the price of a company’s product by the consumer is of significant importance to the marketing activities. Thus, in fixing a price for a product, marketing executives should consider necessary pricing policies and other market elements. 114
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BHM 206 MODULE 3 5.0 SUMMARY In this unit, we examined: Pricing methods Objectives of pricing policy Nature and use of pricing discounts Product positioning and price. 6.0 TUTOR-MARKED ASSIGNMENT i. Let us assume that consumer behaviour in terms of units bought of this manufacturer is as follows: Price No. of units sold 22 50,000 21 60,000 20 70,000 23 40,000 24 30,000 25 20,000 What is the price at which the manufacturer should sell the product? 7.0 REFERENCES/FURTHER READING Boone, Louis E. & Kurtz, David L. (1986). Contemporary Marketing. Chicago: The Dryden Press. Kolter, P. (2000). Marketing Management Analysis, Planning, Implementation and Control , 8 th Ed. New Delhi: Prentice-Hall. Mote, L.; Paul, Samuel & Gupta, G.S. (1985). Managerial Economics – Concepts and Cares. New Delhi: Tata, McGraw-Hill Publishing Company Limited. 115
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BHM 206 PRINCIPLES OF MARKETING UNIT 3 MARKETING COMMUNICATION CONTENTS 1.0 Introduction 2.0 Objectives 3.0 Main Content 3.1 How Communication Works? 3.2 How Communication Influence the Role of Promotion in Market? 3.3 The Promotion Mix 3.4 Determining the Promotion Mix 3.5 The Promotion Budget 4.0 Conclusion 5.0 Summary 6.0 Tutor-Marked Assignment 7.0 Reference/Further Reading 1.0 INTRODUCTION The word ‘communication’ is based on the Latin word meaning ‘common’. Thus, the term communication has come to mean sharing something of common use. In marketing, communication has a very important place. It is that function of marketing which is charged with the task of informing the target customer about the nature and type
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