Price, product, promotion and place are the four ps of a. Thus, the companys management and marketers invest a lot of time to establish pricing policies for international markets and customers. The influence of marketing mix and perceived risk factors on online purchase intentions yaty sulaiman1, maha mohammed yusr1, khairull anuar ismail1 1school of business management, college of business universiti utara malaysia sintok, kedah. This, therefore bring all the variables in the marketing mix to product, promotion, price and place distribution.
All products or services move through product lifecycles. The influence of marketing mix and perceived risk factors on. Pricing price is the only element in the marketing mix that creates sales revenue. The marketing strategy helps you define, promote and distribute your product, and maintain a relationship with your customers. Typically these lifecycles move through four stages. Pricing, as part of the marketing mix, is essential and has been always one of the most difficult decisions in marketing because of heightened competition myers 1997, gray market activities assmus and. The reason for this importance is that where the rest of the elements of the marketing mix are cost generators, price is a source of income and profits. Pricing decision analysis the setting of a price for a product is one of the most important decisions and certainly one of the more complex. Marketing mix variables that affect pricing decisions.
Pricing decision in the marketing mix business plan nigeria. It is used to describe the combination of four inputs product, price, place, promotion which constitute the core of a companys marketing system. What are environmental factors that affect marketing decisions. Factors that affect pricing decisions 2012 book archive. The items of marketing mix were measured on 5 point likert scale ranging from 1 strongly disagree to 5 strongly agree for assessing the marketing mix factor that affect the customers satisfaction. The company set high prices and provide high quality products in the market. The marketer should know the factors that influence the pricing decisions before setting the price of a product. Marketing decisions must take into account these environmental factors to create an accurate picture of the marketplace and the companys standing within it. Through pricing, the organization manages to support the cost of production, the cost of distribution, and the cost of promotion. The marketing mix is a set of four decisions which needs to be taken before launching any new product. Furthermore, the author describes the importance of pricing and describes it as the most flexible element of marketing mix, which can be changed quicker than other elements of marketing mix.
Price is the only element of marketing mix that helps in generating income. Pdf an examination of factors that affect pricing decisions for. Impact of marketing strategy on business performance a. Pricing decisions global marketing chapter 11 how to set price the global manager must develop systems and policies that address price floor. An examination of factors that affect pricing decisions for export markets. Pricing is a very critical decision in marketing management it is one variable that is very important to both seller and buyer. Kotler and armstrong 2006,also define place or distribution as a set of interdependent organizations involved in the process of making a product available for use or consumption by consumers. These should be clearly outlined in quantitative terms so as to be understood by all the members involved in pricing decisions. This is because the marketing mix is decided as per the segment and the target you are going to have as well as the positioning you want to achieve. Pdf an examination of factors that affect pricing decisions. A change in price not only directly affects revenue but has major consequences on other decisions. For example, when toyota developed its lexus brand to.
Pricing is one of the most important elements of the marketing mix, as it is the only element of the marketing mix, which generates a turnover for the organisation. For instance, an organization has set a goal to produce quality products, thus, the prices will be set according to the quality of products. It is one variable that is very important to both seller and buyer. A firm also has to look at a myriad of other factors before setting its prices. The relationship between marketing mix and customer. An enormous number of factors affect pricing decisions. These variables are also known as the 4 ps of marketing or the product marketing mix. The current study seeks to examine the influence of marketing mix 4ps promotion, price, place and product on the efficiency of crm responsiveness, empathy, customer relations, assurance and. Factors affecting the pricing decisions economics discussion. In short the decisions taken in respect of price affect other marketing mix variable decisions and so all of these decisions should be consistent with one another to make a marketing program effective. If the company has already selected its target market and positioning attentively, then its marketing mix strategy, with price, will be comparatively straightforward. Factors are also classified in terms of competitionrelated factors. Price is one of the key elements of the marketing mix. If price is lowered, for example, then sales is most likely to increase.
Price also happens to be a major element of the marketing mix. Price pricing pricing on an international scale is a complex task. An examination of factors that affect pricing decisions. Thus, the very first thing which affects pricing is not marketing mix, it is segmentation, targeting and positioning. Marketing orientation, pricing strategies, pricing objectives, telecom, jordan. The aim of this research was to know the influences of 7p marketing mix variables, which consists of product, price, promotion, place, people, physical evidence and process on purchasing decision of consumers in determining appropriate marketing strategy of malang apples at giant mog. Overall marketing strategy, objectives, and the marketing mix internal factors affecting price decisions compare must decide its overall product marketing strategy before setting price pricing helps to accomplish company objectives. Marketing objectives affect pricing decisions vtiger experts.
Price is the firms tool for capturing value, and it affects to a great extent the wealth of the hotel and its patrons. Sep 06, 2018 pricing decisions are always tough and they are made tougher with a change in the marketing mix. Who determine the price structure of a product, top management, ceo, the entrepreneur, answer is no. Aug 04, 2015 in short the decisions taken in respect of price affect other marketing mix variable decisions and so all of these decisions should be consistent with one another to make a marketing program effective. Factors that influence pricing decisions in todays global market place. But the scope of decisions under these elements are different. Marketing strategy based on marketing mix influence on. This study attempts to analyze marketing mix factors influencing the purchase decision. Considering the importance in seeing what things can affect the behavior of consumers in taking decisions in the rented vehicle. The researcher recommends that the companies should focus more on marketing orientated pricing and share it in the marketing strategy of the company. Moreover, the right decisions are well supported to. The business should also keep its product as differentiated and set relatively high price for the uniqueness of its product. As we know the marketing mix made up of product, price, place and promotion is the perfect combination of elements you need to get right for effective marketing. Explain the factors that affect promotion mix or marketing.
Marketing mix or 4 ps of marketing product marketingmix. There are many factors which affect price in international markets. In this article, we will look at 1 the four ps, 2 history of the marketing mix concept and terminology, 3 purpose of the marketing mix, 4 key features of the marketing mix, 5 developing a marketing mix, 6 key challenges, and 7 marketing mix example nivea the four ps product. The aim of this research was to know the influences of 7p marketing mix variables, which consists of product, price, promotion, place, people, physical evidence and process on purchasing decision of consumers in determining appropriate marketing strategy of. Aug 07, 2014 after product, pricing plays a key role in the marketing mix.
The promotion has a very high level of impact to increase the sales of products. Yaty sulaiman, school of business management, college of business. The marketing activities also referred to as the marketing mix or the 4ps have a direct impact. Managers must determine the objectives for the pricing objectives. The main objective of the firm, that is, to earn a profit very much depends upon the correct price decision. These components are called marketing mix decision variables because a marketing manager can vary the type and amount of each element. Meaning of price price in the narrow sense is the amount of money charged for a product or service. The goal of the marketing mix is to satisfy customers through offering the right product with the right promotion and place i. While some lifecycles can be extremely short for example, the pet rocks, trolls, pogs, etc. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Elements of marketing mix product a product is anything that satisfies a consumer need. Marketing mix is the combination of different marketing decision variables used by a firm to market its goods and services. The product is either a tangible good or an intangible service that is seem to meet.
Depending on the segment rich or poor, target customers. Pricing objectives refer to the targets to be achieved via pricing strategies in the marketing plan. The business should also keep its product as differentiated and set relatively high price for the. Price planning involves decisions as to whether prices should be standardized, the levels at which they are set, the currency in which prices are quoted and terms of sales.
Understanding the marketing mix concept 4ps cleverism. Price is one of the important elements of marketing mix. Most flexible marketing mix variable for marketers price is the most adjustable of all marketing decisions. A company achieves the objective by price, which is one of the tools of marketing mix.
Factors that affect price in any market and pricing. British journal of marketing studies published by european. Understand why companies must conduct research before setting prices in international markets. The most wellknown marketing strategy tools are the 4 ps model. Marketing mix professor jerome mccarthy marketing mix early 1960s proposed consisting of four main factors product, price, place and promotion that each of factors contains multiple activities. Pricing is a very critical decision in marketing management. Marketing mix strategy kotler 2003 identified the marketing mix is the set of selling tools for helping companies to aim the target customers in marketing. Marketing objectives are internal factors that affect pricing decision. After product, pricing plays a key role in the marketing mix.
Factors that affect pricing strategies for international. How to set up an effective marketing mix pricing decisions the variables influencing product pricing the demand curve performing breakeven calculations marketing. This paper examined the basic factors that affect price in any market and the factors that influence channel structures and strategies, as well as the debate over standardisation and localisation of international advertising. Pricing is considered as part of 4ps of marketing mix. A basic pricing decision is to choose between a one price policy and a flexible price policy. The marketers should set the prices as per the organizational goals. Factors affecting pricing decisions business study notes. The pricing objectives can be divided as short term objectives and long term objectives 1 short term pricing. Some factors are internal to organisation and, hence, controllable while other factors are external or environmental and are uncontrollable. Figure2 shows the factors that affect the pricing decisions. Factors are also classified in terms of competitionrelated factors, marketrelated factors. Price planning is the basic consideration in international marketing. Marketing mix can be called a set of tools intervention in the market horovitz, 2003. In a broader sense it is the sum of all the value that consumers exchange for the benefits of having or using the product or service.
Pricing decisions pricing decisions objectives examine. The internal factors which affect pricing include organizational factors, marketing mix, production differentiation, the cost of a product and the objectives. Therefore, cost is a major factor that will affect pricing decisions. As well as taking into account traditional price considerations such as fixed and variable costs, competition and target groups click here for further information about marketing mix pricing an organisation needs to consider additional factor such as. Those factors include the offerings costs, the demand, the customers whose needs it is designed to meet, the external environmentsuch as the competition, the economy, and government regulationsand other aspects of the marketing mix, such as the nature of the. Organizational factors refer to the internal arrangement or mechanism for decision making and its implementation. The factor of marketing mix including in the study were productsservices, price. Factors affecting pricing decisions for the remainder of this tutorial, we look at factors affecting pricing decisions and how marketers set price. In determining a pricing policy, a company should not only consider the immediate effect of prices, but also give due weight to the reaction of competitors. When you are in the process of selecting the target markets, the marketing mix decisions must be evaluated. Reaction of competitors influence pricing decision.
Our study of how to set the best prices will take the marketing approach. Pricing product is relatively considered better than pricing services. Factors affecting international marketing strategies. These four marketing mix elements form the core of all marketing efforts. Before setting price, the firm must decide on its price strategy for their goods. A marketing manager should identify and study the relevant factors affecting the pricing. The final price for a product may be influenced by many factors which can be categorized into two main groups. Understand the factors that affect a firms pricing decisions. Therefore, a marketer should adopt a wellplanned approach for pricing decisions. Therefore, product costs are very important to make a pricing decision. To ignore the outside factors is to set yourself up for failed marketing and lost revenue that can, in turn, affect the health of your entire brand. Marketing mix refers to the set of controllable factors that a firm can use to influence the buyers response within a given marketing environment. If your product or promotions change, price will change.
Pricing product, external and internal factors affecting. It should call for an effective market intelligence of the competitors pricing decision. Basically two factors, which affect the company price decision and strategy. Is the price competitive given local market conditions. Pricing, as part o f the marketing mix, is essentia l and has bee n always one of the most difficult dec isions in marketin g b ecause o f heightened co mpetition myers 1997, gray market act. Basically, the elements for market mix decisions are the same for domestic marketing and international marketing. In terms of marketing mask kefir, marketing mix is one important element that is expected to have an influence towards consumer decisions. One of the key elements of a product, which enters in to a new market, is its price. This then constitute the four ps to denote the four elements of the marketing mix. What are the factors influencing pricing decisions in a market. Factors to consider when pricing hotel rooms insights.
The marketing discipline is based on the marketing mix concept, which consists of the 4 ps. These four variables help the firm in making strategic decisions necessary for the smooth running of any product organization. Pricing decisions objectives examine internal and external factors that affect pricing decisions and general pricing approaches. On the other hand, if the price has to be skimming price, then promotions need to go up so that more customers can be attracted and brand equity can be built. Dec 07, 2019 the marketing mix is a set of four decisions which needs to be taken before launching any new product. Marketing mix variables that affect pricing decisions marketing mix strategy from marketing 300 at sophia university. In australia, joye and blayney 1990 found that product costs were of major importance in the pricing decisions of the majority of companies. This paper examines factors that affect pricing decision for export markets, and sheds light on international pricing strategies in a global competitive market. Through pricing, the organization manages to support the cost of production. According to alexander 12, when travel agents sell a travel product to a customer, they will charge a percentage of the sales price as an agency commission. Marketing mix is a set of operational decisions regarding product, price, place, and promotion that are expected to be a simple thought in creating a marketing strategy sumarwan et al.
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