Price as Marketing Mix

When starting a business or stepping into the business world, “pricing” comes attached. We can define pricing as adding value to a commodity in simple terms. In the process of buying or selling a product at a particular price, both seller and purchaser negotiate to benefit mutually, which is profitable for both parties. Price is one of the most crucial components of the 4Ps or the elements of the marketing mix. 

In this article on the understanding of the price concept in marketing, you will get detailed information on the marketing mix, the 4 and 7Ps of the marketing mix, and the importance of the price concept in marketing. So, without further ado, let us get started with the concept of price as an element of the marketing mix in the business study material.

What is the Marketing Mix? 

The marketing mix is a set of marketing tactics or tools taken into consideration for promoting the goods and services in the market where your potential customers are widely available. 

Earlier, the marketing element had only four Ps; however, with the changing times, it was revamped to 7Ps. Product-based companies introduce several intuitive strategies for selling their products, and the marketing mix was part of it.  

As per the promotion and marketing strategy, the product sale increases. There are four significant components of marketing, also termed as 4Ps, which are price, product, place, and promotion. 

Out of the four, the product’s price plays a significant role. One must fix pricing, i.e., attach value to the product to sell or purchase.

The 4Ps of Marketing in Brief 

Let us understand the 4Ps in detail.

• Product in the marketing mix 

A product is an actual commodity that is ready to be sold in the market to satisfy the emerging needs of the customers or a group of people. The product can be of three types; tangible products, intangible products, and services. The product’s life cycle includes several phases starting from the growth phase, the maturity phase, and lastly, the sales decline phase. 

• Price in the marketing mix 

Pricing a product is one essential step for a producer to take. It is mainly concerned with giving value to a commodity that the consumer pays before buying it. Since it decides the profit and loss factor, pricing is the most critical aspect. 

Any fluctuation in the product’s price can considerably impact the business. As a result, all essential factors need to be analysed thoroughly. These include competitors’ prices, customers’ locations, terms of sale, and discounts.  

• Place in the marketing mix 

Another important factor of the marketing mix is distribution or placement. One must sell the product at a place where potential buyers or customers can easily access it. 

• Promotion in the marketing mix 

Today promotion of a product has become a crucial factor for its sale. It is the most expensive but essential component of the marketing mix that helps attain the consumer’s attention and triggers them to make a purchase.  

Apart from these 4Ps, there are 3 more recently introduced Ps in the marketing mix. These Ps include people, processes, and physical evidence.  

Concept of Pricing as an Element of Marketing Mix

Pricing is one of the most important concepts when it comes to business. One needs to attach a value to the product to sell or purchase it. 

Every time a consumer takes a service, they pay a sum to the seller for the product they are investing in. Both seller and purchaser negotiate a mutually profitable deal for both parties during this process.  

Several factors determine the product’s price. These aspects include the raw material used, profits expected, etc. The final value or pricing of the product depends on these factors.  

Introduction of Price in Marketing Mix

Every time you visit a shop to buy anything, say clothes, you pay the price. We can define the price concept in marketing as any amount a person pays to attain a product, service, or idea. Product pricing is the most crucial step while starting and running a business, as every profitable organisation aims to earn maximum profit.  

The shopkeeper attaches the tag to the item that the potential customer is willing to pay while keeping a certain margin simultaneously, which leads to growth and development in the future. Apart from this, the seller considers numerous other approaches while deciding the price of a commodity. These aspects are as follows:

• The cost accountability 
• The competition prevailing in the market 
• The expectations of customers from the product

The “right pricing policy” highly influences the success of the business. It is a guideline decided by top-level managers for achieving exceptional product sales.  

Factors Influencing Pricing 

Many factors, directly and indirectly, influence the pricing decisions of the product in the marketing mix. These factors are as follows- 

• Organisational factors 
• Marketing mix 
• Product differentiation 
• Product cost 
• The demand for the product 
• Competition in the market 
• The product supply

Conclusion 

We thus conclude our study material on the concept of price as an element of the marketing mix. The marketing mix is mainly concerned with rightly positioning your products and services between the right people at the right time and at the right price. This article discusses the price concept in marketing, the most crucial element in the marketing mix. In this article, we studied the concept of the marketing mix in length. We covered several other topics, such as the Ps of marketing. We also talked about pricing in detail.