Page 22 - MARKETING MIX
P. 22

PRICING
                                             Internal Factors :

                                             Marketing Mix Strategy

































                                             Price is the only marketing mix instrument which is used by



                                             a firm to achieve its marketing objectives. Thus, the pricing



                                             decision  has  to  be  in-line  with  the  product  design,




                                             distribution,  and  promotion.  This  is  important  to  develop



                                             marketing  programmes  that  are  effective  and  consistent.
                                             Internal Factors :

                                             Decisions made for the other elements in the marketing mix



                                             may leave an impact on the pricing decision.
                                             Cost



































                                                 Cost  is  an  instrument  used  by  a  firm  to  fix  the  product’s



                                                 floor  price/minimum  price.  The  company  will  choose  a



                                                 price that will be able to bear the overall production cost,



                                                 distribution,  and  product  sales  including  sufficient  profit




                                                 to be used as the turn over capital for the company.


                                                 Fixed  cost,  variable  cost,  and  total  cost  are  the  types  of




                                                 costs  that  influence  the  pricing  of  a  product.  Fixed  costs



                                                 are  costs  that  do  not  vary  with  production  or  sales



                                                 revenue.  Variable  costs  are  costs  that  vary  directly  with



                                                 the level of production. Total cost consists of the sum of



                                                 the  fixed  and  variable  costs  for  any  given  level  of



                                                 production.



                                                 Price  and  cost  are  relative—one  entity's  price  may  be



                                                 another's cost.






















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