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Price mix (Factors to consider when setting prices (Inflation, Demand,…
Price mix
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Role of pricing
It is the only element of the marketing mix (7 P's) that brings in income for the company. All the other 6 P's are expenses for the company.
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Setting prices
demand based
Price is set according to the quantity demanded, meaning the higher the demand the higher the price charged and vice versa (hotel, airlines, uber)
competition based
mostly used in highly competitive industries such as supermarket, coffee shops (price wars)
Cost demand based
Determine cost of production: 5 GBP, add profit margin: 15 GBP, Final selling: 20GBP
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Definition: The measure of value ($, Euro, GBP) offered in exchange between buyers and sellers
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