Commercial Applications
"Pricing is fundamental to all marketing efforts." Give two reasons either for or against.
Marketing Mix
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Answer
For the statement — Pricing is indeed fundamental to all marketing efforts. Two reasons:
- Determines sales volume and profit margins — Price determines largely the sales volume and profit margins. Price structure affects the competitive position and market share of the firm. A firm cannot succeed if its prices are too low or too high. Without pricing there can be no marketing as a sale takes place only when the buyer and the seller agree on price.
- Regulates the entire marketing system — Price is the regulatory mechanism by means of which the seller and the buyer come to a mutually satisfactory understanding. The quality of a product, services supplied, channel of distribution and promotional effort all depend greatly upon the price. Therefore, pricing influences all other elements of the marketing mix.
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