Part Introduction

IN' PART FIVE WE COVER an element of the marketing mix that is both easy and expensive to manipulate - price.

Price cutting is an easy way to attract customers quickly, but a poor route to long-term market success. The reason is that giving a 10 per cent price cut to a customer can mean taking a 50 per cent cut in profits. The industrialist Philip Armour explained that businesses often resort to price cutting: 'Anybody can cut prices, but it takes brains to make a better article.'

Many internal and external pressures influence the price decision from internal costs to government legislation. The examination of these in Chapter 16 leads to vedue-based pricing, where a customer's perception of price, rather than costs, drives price. Chapter 17 then looks at pricing strategies under a variety of situations, such as when launching a product, when changing prices and when pricing within a product range.

CHAPTER 16 Pricing Considerations and Approaches

CHAPTER 17 Pricing Strategies


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