What Is Pricing

One of the
four major elements of the marketing
mix is price.  It is one of the four P's.  Price, Product,
Promotion and
Place, or where the product is distributed.

The price is a
very
significant factor in determining the other elements of the marketing
mix.  Price determines the
consumer group that will be targeted, as well as
the advertising and promotion and
distribution.

Pricing
structure must take into account not only the cost to
produce the product
which includes materials, time, labor, overhead.  But, must also consider
the
competition's price, and potential legal matters that may arise with the

product.

New products are often priced at what is known as
penetration
pricing, which is an attempt by a company to capture a share of
the market.  This is often a
lower price to draw customers away from the
competition. 

There are
other  pricing strategies used in
marketing, it all depends on the product, the target market,
the competition,
the product's life cycle and the firm's expectation of expansion and

distribution of the product. 

For greater detail on pricing, click on
the link
below.