Pricing: a Significant Component of Marketing Management (2024)

Pricing is a significant component of marketing management. The price of a product or service is a major determinant of the market demand for the product. Pricing considerably affects competitive position of the business. Pricing has a marked bearing on the company’s revenue and net profit.

Pricing has not been given that much attention as has been given to other segments of marketing process. In the words of Daniel Nimer, Vice President of Corporate Planning of the Canteen Corporation of Chicago, “all the others i.e., product development, packaging, advertising and sales promotion, etc. generate costs. Seldom is pricing given the same careful attention”.

Determination of proper price of the product is a difficult task for the marketing manager. The price should be such whereby sales can be maximised and overall objectives of the concern are achieved. Clark and Clark have rightly pointed out “Price is a matter of fundamental interest in the market. Buyers and sellers alike are constantly watching prices…… price is the point of interest to them”.

‘Price’ refers to the money value of a product. In simple words, it represents the money which the buyer offers for the product offered by the seller. Mow-a-days a customer not only wants products but also allied services such as free home delivery, credit facilities, warranty, repair facilities etc. The price shall not be for the product alone but shall also include charges for these services.

While making a comparative study of prices offered by different sellers we should keep in mind that price includes the value of product and service also. In brief, “price is the amount of money which is needed to acquire in exchange some combined assortment of a product and its accompanying services. —William J. Stanton.