Role of Price in 4P's of Marketing

1. PRESENTED BY
SIMRAN KAUR

2. WHAT IS PRICE?
 Price is a value that will purchase a finite quantity,
weight or other measure of good or service.
 It is determined by what (1) a buyer is willing to pay (2)
a seller is willing to accept, (3) the competition is
allowing to be charged.

3. WHAT IS PRICING?
 Pricing is the marketing activity involved with
capturing or “harvesting” the value created by the
other types of marketing such as product, distribution
and promotion.

4. FACTORS AFFECTING PRICE
DETERMINATION

5. FACTORS AFFECTING PRICE
DETERMINATION(contd.)
Internal factors
1. Cost (what introductory prices should be kept
considering demand and competition in market)
2. Survival price (what price should be kept to attract
customers during downfall)
3. Profit (primary objective of a firm)
4. Market share (flexible prices)
5. Product quality (add on values constantly)

6. FACTORS AFFECTING PRICE
DETERMINATION (contd.)
External factors
1. Customers (nature and behavior)
2. Government agencies (pricing policy and legal
policy)
3. Suppliers (price of raw materials)
4. Channels (direct and indirect channels)
5. Competitors (fix the price less, same or greater than
others)

7. PRICING STRATEGIES
1. Competitive pricing (pricing based on competitors’
price)
2. Good, better, best pricing (same product offered in
different formats at different times)
3. Loss leader (lower prices to attract customers)
4. Multiple pricing (offering slight discount on
products in greater quantities)
5. Optional product pricing (spend a little extra on
product by adding on extra features)

8. PRICING STRATEGIES(contd.)
6. Penetration pricing (keeping the price lower of a
newly launched product)
7. Premium pricing (product is of high quality but will
be sold in small quantities)
8. Product bundle pricing (group several products
together for sale)
9. Product line pricing (range of complementary
products packaged together)
10. Skim pricing (place higher prices but gradually lower
price)

9. PRICING METHODS
1. Cost plus pricing (set the price at production cost,
including both cost of goods and fixed costs at
current volume)
2. Target return pricing (set the price to achieve a target
return-on-investment)
3. Value based pricing (price product based on the
value it creates for the customer)
4. Psychological pricing (take into consideration the
consumer’s perception of price)