The ultimate objective of all marketing efforts is to generate revenue, which depends heavily on the price of the product or service. Some of the areas that pricing must look into include cost of development/ manufacturing, profitability, wholesale and retail prices, volume discounts and target market pricing etc.
The promotion deals with the communication about a company's products and/ or services, targeted to improve the product image in customers' minds. It includes personal selling, direct marketing, advertising, publicity and other forms of marketing promotion campaigns.
In addition to these 4 Ps of marketing mix, other Ps have been proposed like people, process, packaging etc. These are quickly taking over the new concept of marketing mix as being very important factors for a smooth and efficient system.
New product development has become a significant source of differential advantage for companies nowadays. With the advent of modern technology, especially internet; customers are more informed of their needs and how to satisfy them. Hence, it is important for companies to consistently develop new products and improve existing ones to remain competitive. A business exist to satisfy customers while making profits (Etzel Walker Stanton, 2003, p.217) and hence it is required to identify the exact customers' needs before developing a product or service to satisfy it.
The life cycle of a product consists of four stages namely, introduction, growth, maturity and decline. Product strategy varies for each of these stages and accordingly, all other strategies have to be developed to suit the requirements of a particular stage. For instance, during the introduction stage, it is unwise to manufacture a large quantity of product, but it is required during the growth and maturity stages to keep up with the demand of the product.
C. Pricing Strategy
Pricing decisions are affected by a variety of factors as stated above. In addition, these also depend upon the target customers. Price skimming strategy is used for innovative products by putting a very high price for the product and taking the first mover's advantage. Another strategy is to use the price penetration techniques to keep the price at a minimum in order to attract more customers. Hence, the pricing decisions vary and depend upon the market conditions. A general approach to pricing include selection of pricing objectives, determining demand of the product, estimating own costs and also the costs of competitors who are offering similar products in the market, and then the pricing method is selected (Kotler, 2003, pp. 472-485).
A common method of pricing is to use a cost plus approach, where the price of the product is determined by the amount of money required to produce the product plus a margin over it (Etzel Walker Stanton, 2003, p.331). But other pricing strategies can also be used. A general objective of the pricing strategy is to gain maximum benefit while maintaining competition and the right positioning in the customers' minds about the company's products and services. Other pricing strat