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Concept
Pricing
Résumé
Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the marketplace, competition, market condition, brand, and quality of product.
Pricing is a fundamental aspect of product management and is one of the four Ps of the marketing mix, the other three aspects being product, promotion, and place. Price is the only revenue generating element amongst the four Ps, the rest being cost centers. However, the other Ps of marketing will contribute to decreasing price elasticity and so enable price increases to drive greater revenue and profits.
Pricing can be a manual or automatic process of applying prices to purchase and sales orders, based on factors such as: a fixed amount, quantity break, promotion or sales campaign, specific vendor quote, price prevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. An automated pricing system requires more setup and maintenance but may prevent pricing errors. The needs of the consumer can be converted into demand only if the consumer has the willingness and capacity to buy the product. Thus, pricing is the most important concept in the field of marketing, it is used as a tactical decision in response to changing competitive, market and organizational situations.
The objectives of pricing should consider:
the financial goals of the company (i.e. profitability)
the fit with marketplace realities (will customers buy at that price?)
the extent to which the price supports a product's market positioning and be consistent with the other variables in the marketing mix
the consistency of prices across categories and products (consistency indicates reliability and supports customer confidence and customer satisfaction)
To meet or prevent competition
Price is influenced by the type of distribution channel used, the type of promotions used, and the quality of the product.
Source officielle
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