Four P's Of Marketing Strategy Summary
Key purpose of the article
Pricing is one of the four major P’s of the marketing mix. The article suggests that when the other three P’s of promotion, place and product are equal, then pricing becomes a major and influential factor in the success of an organization and the purchase decisions of customers.
Identify two pricing concepts that you learned from reading this article. The article highlights the importance of coming up with an appropriate price strategy by the fleet owners as the key purpose of the article. The costs of productions and the profit margin should be factored in when determining an appropriate price for a product. The idea is in line with the concept of break-even analysis and the …show more content…
Demand is the quantity buyers are willing and able to buy at a given price within a specified period of time. Supply on the other hand is the quantity sellers are willing and able to sell at a given price. Both the demand and supply can be used to set prices of a commodity in a market with the aid of the market forces. The demand curve tends to fall from left to right while the supply curve tends to rise from left to right. Customers buy more at reduced prices while suppliers supply more at high prices. Market forces regulate the prices until a market equilibrium is reached where quantity demanded is equal to the quantity supplied. Below the equilibrium price, there is a shortage as the demand is more than the supply and suppliers have to increase their prices towards the equilibrium point.
The article indicates that costs and profit margins should be factored in determining price of a product. The pricing tactic in question is known as a markup pricing. The tactic involve taking up the costs of purchase from producers and adding it to other amount of expenses not accounted for in the purchase price and that of profit to arrive at a selling price called markup. The markup should be able to adequately cover for expenses and the profit …show more content…
The concepts help a consumer to decide on whether to reduce, increase or maintain the units to be purchased. A consumer may perceive a product of high value to be of high quality. The attitude of a customer in terms of elasticity also influence customers’ decisions. One who is sensitive to price changes will either increase or reduce her demand according to the price changes. On the other hand, a consumer with a unitary elasticity will maintain the demand regardless of an increase or decrease in price of a