"Price is a measure or expression of value concerning how much a good or service is worth to the buyer."
Usually prices are expressed in monetary terms. However this is not always the case. The price of a product or service can be expressed in terms of other products and/or services.
For example, I may offer you my old lawn mower in exchange for your snow blower -- the price of my lawnmower is your snow-blower. In this case, I valued my lawn mower at 'one snow blower.' If you accept, then you have valued your snow-blower at 'one used lawnmower.'
The Major Pricing Questions
The first question is what should be the "base price" charged for the product? You can think of base price simply as "list price." In other words, the price of one unit of the product at its point of resale to the consumer or to a business buyer.
The second pricing question is what possible adjustments should be made to the base price? For example, do we need to offer a discount schedule specifying quantity discounts, cash discounts, seasonal discounts, etc.? Whatadjustments need to be made to allow for shipping and handling costs? Should promotional allowances for distributors be built into the pricing schedule?
The third question is: "how should price be managed over time?" How should price be modified in response to changes in customer demand, to competitors' price changes, or to changes in economic conditions?
By answering these question, marketing managers can build a 'pricing plan' that coordinates pricing activities with other components of the marketing mix.
Usually prices are expressed in monetary terms. However this is not always the case. The price of a product or service can be expressed in terms of other products and/or services.
For example, I may offer you my old lawn mower in exchange for your snow blower -- the price of my lawnmower is your snow-blower. In this case, I valued my lawn mower at 'one snow blower.' If you accept, then you have valued your snow-blower at 'one used lawnmower.'
The Major Pricing Questions
The first question is what should be the "base price" charged for the product? You can think of base price simply as "list price." In other words, the price of one unit of the product at its point of resale to the consumer or to a business buyer.
The second pricing question is what possible adjustments should be made to the base price? For example, do we need to offer a discount schedule specifying quantity discounts, cash discounts, seasonal discounts, etc.? Whatadjustments need to be made to allow for shipping and handling costs? Should promotional allowances for distributors be built into the pricing schedule?
The third question is: "how should price be managed over time?" How should price be modified in response to changes in customer demand, to competitors' price changes, or to changes in economic conditions?
By answering these question, marketing managers can build a 'pricing plan' that coordinates pricing activities with other components of the marketing mix.