Unit 10 is all about Price, which refers to how much a company charges for a product or service, and how much a customer ultimately pays for it. Though it sounds simple, there are several factors that affect the price of a product or service, including where that product is being sold, what the demand looks like for that product, what competitors are charging, whether coupons might be applied, and how many different stages there are in the sales process.
Organizations need to be strategic in their pricing; they need to determine what approach works best for their industry and product or service. For example, Walmart and Amazon aim to have a wide variety of products at low prices. Peloton aims to have the best, most comprehensive stationary exercise bike on the market, and its price reflects the premium product and experience that is marketed to customers.
The examples above likely have significantly different target markets; Amazon and Walmart for the bargain buyer, and Peloton for the exercise enthusiast with some serious expendable income.
Companies have to ask themselves What is the lowest price we would be willing to sell this product for? and then understand whether that price is low enough that customers will be interested in purchasing that product. There’s a lot to learn about price, and especially for those of you with small businesses or entrepreneurial ambitions, this unit will be very illuminating.
By the end of this unit, you should be able to:
- Explain what a product is and the importance of products in the marketing mix
- Discuss how price affects the value of the organization’s products or services
- Explain the primary factors to consider in pricing
- Compare common pricing strategies
- Explain price elasticity and how it can be used to set price
- Explain the use of competitive bidding for B2B pricing
In order to successfully complete this unit, you’ll need to do the following:
1. Read this Open Educational Resource (free to access): Module 11: Pricing Strategies1
Please note: you do not need to complete the activities listed in this resource.
2. Watch this video from 365 Careers on Youtube2 (also embedded below) to better understand what Price means as on of the 4 P’s of Marketing.
3. Watch this pre-recorded lecture about Price:
1CC LICENSED CONTENT, ORIGINAL
Why It Matters: Pricing Strategies. Provided by: Lumen Learning. License: CC BY: Attribution
2365 Careers on YouTube: https://www.youtube.com/watch?v=2tzd7XivFqk