Price and Motivation of Marketing

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Price and Motivation of Marketing:

Pricing of a product is a complex process. This process is solved either by intelligent guesses or by extensive market research. Here are some pricing considerations taken into account by economists:

1. If the product is secured by a patent, the price may be very high because the product cannot be duplicated by the competition. On the other hand, if the patented product can be duplicated by the competitors, the initial price of the product may be higher than when the product is launched by the competitor, the manufacturing company may correspondingly lower the price. This process is also known as 'skim-the-cream' price policy.

2. If the product requires a continuous input of resources in order to function (eg., a shaving razor requires a supply of razor blades), the price of the product may be low and the resource price may be high.

3. Prices can be formulated by studying the product demand. A newly launched product is expensive, but when the competitor manufactures a similar product, the original manufacturer has to lower the product prices. This process is also termed 'razor and blade' price policy.

Price and Motivation in a Market:

A lower price doesn't always mean higher sales. Furthermore, the consumer is the ultimate decision maker in terms of buying a specific product, ie., if the product is of no use to the consumer, he/she will never buy the product no matter how vigorous the marketing practice is or how economical the product is.

Furthermore, consumers tend to stay away from underpriced products because they believe the product may be of low quality. Additionally, consumers also tend to stay from products that display continuously falling prices; consumers will only buy these products when the price has stabilized at the bottom level. Consumers' purchasing power may also be limited and the consumer may not repurchase the same product even if the prices are low.

Additional Readings:

1. Functions and Elements of Growth in Marketing Management
2. Marketing Organization and Functions of a Marketing Manager
3. Functions and Essentials of New Project Planning
4. Types and Various Stages of Market Studies
5. Naming Products and Name Testing Research
6. Planning of Advertizing Budgets
7. Basic Steps of Test Market Studies
8. Trade through Selected Agencies
9. Price and Motivation of Marketing
10. Marketing Functions at different levels of Development
11. Elements of a Marketing Mix
12. Advantages and Disadvantages of Branding
13. Packaging and Sales Promotion
14. New Product Development Strategy
15. Screening a New Product

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