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Theories behind Pricing Strategy As Applied By Apple Company - Research Paper Example
Author : funktracy
Pages 4 (1004 words)
Price is regarded as one of the most important elements of the marketing mix. In fact, price is the only element of the marketing mix that generates revenues, while all the other elements namely product, promotion, and place represent cost…
Regardless of whether or not a company’s product is the best in the market in terms of quality, the company must set a price that convinces the ordinary consumer of the quality of the product. This implies that the price of the product must match the quality of the product sold. In setting a price for a product, a company must take into consideration the nature of the market in which it operates. This includes analyzing the prices charged by competitors in the market. This is because regardless of the quality of the product that a company intends to introduce in the market, consumers will always compare the prices of all the companies in the industry and match them with the quality in arriving at a decision on which company to buy from. In this regard, marketing experts argue that for a company to attract customers, it must ensure that the prices charged are not too high or too low compared to those of its competitors (Griffin, 2013). Secondly, an effective marketing strategy that a company adopts must take into consideration the cost. As such, in setting a price, a company must first calculate all the cost incurred in the development of the product and subtract it from the revenue sources. ...