Price is one of the four key factors in marketing a product or service, along with product, place, and promotion. It refers to the amount that consumers are willing to pay for a product or service. Properly determining product price includes an analysis of the competition, the demand, production costs, and what consumers are willing to spend. Various pricing models may be considered, such as choosing between one-time purchase and subscription models.
Price is considered a vital element of the marketing mix because it dictates a company’s survival and profit. Pricing of a product plays an important role in determining the success of a company. Several factors like list price, competitor’s price, discount, terms of sales, etc., are taken into consideration before deciding on the price of a good or service. A well-chosen price can help the firm attain its financial objectives, adapt to the market realities, and conform to other elements of the marketing mix. However, marketers cannot simply price products and services based on the expected revenue of the organization. The price must be set so that the buyer sees value in the product offering and the price they will pay for it.
