Marketing and Pricing

The definition of Marketing is “to provide products or services that meet the needs or wants of customers.”  Marketing involves the 4 P’s.  Product, Place, Price and Promotion. 

You can get a university degree in each of those 4 disciplines, but briefly:

Product:  What to produce
Place:  Where to market your products or services
Price:  How much to charge for those products or services
Promotion:  How to inform customers of your products or services.

Some academics have broken the 4 P’s down into 7 P’s by adding:

People:  To provide excellent customer service and support
Process:  How you deliver your products or services (stores, internet, sustainability)
Physical Evidence:  The packaging, brand, placement on store shelves or displays, etc. 

As mentioned in my previous blog Pricing is circular in nature.  The products or services determine the price that you charge, but the prices that customers are willing to pay affect how the products or services are developed and provided.  The art of pricing is an iterative process with the product marketing teams. 

The analytical side of Marketing talks about the 5 C’s of good marketing research to help identify the Products and Pricing:

Customers:  Who are your customers or target market, segments, etc.?
Conditions: (Market):  How is the economy in your target market?
Company:  What are your company’s strengths and weaknesses, skills, etc.?
Costs:  How much does it cost to produce your products or services?
Competition:  Who are your competitors, their products and pricing, strengths and weaknesses?

Analyzing the 5 C’s is imperative to a successful product launch as well as how to price the product to ensure profitability.  Many companies use cost-plus pricing but that is not the answer, it is only one variable.   In the end the price that customers are willing to pay is all that matters.  You must design a product or service that customers are willing to pay for the company to be successful.