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Price must be viewed in the context of both the buyer and the marketer
Marketer’s perspective:
1. Often the only element the marketer can change quickly in response to demand shifts.
2. It is the only element in the marketing mix that generates revue as all other elements represent costs i.e. relates directly to total revenue TR = Price * Quantity
3. It generates profit for organizational survival i.e. affects profit directly through price, and indirectly by affecting the quantity sold Profits = TR – TC
4. Affects total costs through its impact on the productivity, efficiency, reduced labour cost and quantity sold and Can be used as the basis for cost recovery i.e. can be used to create economies of scale
5. Can use price symbolically to communicate or emphasize quality and other aspects
6. Can be used as a bargaining tool..
7. Can use price to create and retain customers at a profit.
8. Can be used as a competitive weapons or strategy
9. Affects all other elements of the marketing mix
10. Determines the allocation of product that must be matched with opportunities
Buyer’s / customer’s perspective:
1. Allows comparison of various products
2. Facilitates assessing value for the money in terms of benefits derived from the product such as functional , operational , financial and psychological values i.e. price represents what is being exchanged and deciding whether it is worth paying
3. Price levels represent perceptions of quality of the product
4. Price influences perception of functional and other benefits
Lellah answered the question on November 5, 2021 at 12:30
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