Marketing Mix 4ps – Price Discussion
Marketing Mix 4ps – Price Discussion
Camille Beepath-Tineo
School of Business, Liberty University
Author Note
Camille Beepath-Tineo
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Camille Beepath-Tineo.
Marketing Mix 4ps – Price Discussion
Business leaders make decisions relating to brand market positioning, distribution, pricing, and promotions that are influenced by marketing strategies. A firm’s marketing campaign involves the utilization of the marketing mix elements. The price factor of the marketing mix is the second most influential factor in customer satisfaction (Jedin & Balachandran, 2021; Thabit & Raewf, 2018). The basic idea of pricing is to determine the product price customers are willing to pay, satisfying both the provider and customers. Many scholars argue that the price factor in the marketing mix has many interpretations and perspectives. Some scholars believe that price is the monetary expression of the value of goods and services. Others perceive pricing as a product or service’s value, quality indicator, customer satisfaction, and an influencer of demand and supply. Determining the right mix for pricing is challenging, requiring marketing strategists to consider customer perception and business economics theory to determine the most appropriate price for goods and services. Pricing impacts customer behavior, decision-making, and organizational competitiveness (Bijakšić et al., 2017). Therefore, firm leaders must carefully analyze the price they set for their products and services to remain competitive and maintain their market position. This discussion will include an evaluation of the pricing mechanism in the marketing mix and how it can be implemented effectively.
Pricing and Customer Value and Satisfaction
Price illustrates the importance charged for products and services (Thabit & Raewf, 2018). Customers base their beliefs about the product and service value on price. Ramin et al. (2015) mentioned that the pricing element of the marketing mix is a gauge of quality. Customers use the price as an indication of the quality to expect. A study by Bijakšić et al. (2017) found customers have a psychological response to pricing in which they respond to price level changes. Customers perceive the price as “an important extrinsic cue and indicator to predict product quality or benefits” (Bui et al., 2017, p. 40). According to Jedin and Balachandran (2021), price represents the amount of money customers are willing to exchange for goods and services of a certain quality level. Jedin and Balachandrad studied the marketing mix in the Malaysian edutainment industry and found that price significantly influences customer service satisfaction. They reported that service quality indicates customer satisfaction. Customers rely on the satisfaction and value they receive from a service provider to decide if the service is worth the price. Therefore, the pricing element is a vital consideration in determining customer perception of offering value and quality. Customers become dissatisfied when there is a mismatch between the price of the offering and the value or quality they receive. Ramin et al. (2015) suggested that marketers focus on providing a quality product and matching pricing options to satisfy customers and then add discounts as a promotion strategy to attract repurchases. Bui et al. (2017) argued that customers compare prices for competitive products and make the final selection of products based on their experience, benefits, and perception of quality value for the price offered. Customers repurchasing products look to their purchasing experience regarding the value they receive (Othman et al., 2021).
Pricing and Demand and Supply
Bijakšić et al. (2017) stated that the pricing system is a mechanism for adjusting demand and supply and is part of the economic theory. Pricing influences supply and demand and is the only element in the marketing mix that generates revenue for a business (Bui et al., 2017). Therefore, pricing determinants should include what customers are willing to pay for a product or service. Othman et al. (2021) mentioned that many customers are price sensitive and often avoid purchasing highly-priced products, while others look at other product attributes regardless of the cost. Othman et al. also found that clothing price affects customer retention and product demand in the retail clothing industry. The strategic decision to price products and services demanded by customers generates revenues and profitability (Bui et al., 2017).
Pricing Implications
Ali and Anwar (2021) presented a study on pricing strategies as a determining factor influencing consumer behavior in which they found that penetration pricing and price skimming had a positive effect. Price penetration involves setting a low price once a product enters a competitive market and later raising the price. Price skimming is setting the price of the new product high, the lower its price as the market changes. As a result, customers can purchase the product and potentially receive value from the product. Competitive pricing is also a suitable marketing mechanism to gain market share and influence customer behavior (Ali & Anwar, 2021). In product and service innovations, marketing strategies should include price and advertising variables that affect demand (Mesak et al., 2020). Ali and Anwar (2021) suggested using advertising and word-of-mouth marketing to share pricing strategies and influence customer behavior.
Conclusion
Pricing is essential in the marketing mix, which must be integrated with the product, promotion, and place elements. Marketers are challenged to provide the most reasonable price to customers to compete and earn profits. Consumers become satisfied with an offering if they believe the product or service has provided value for its price. Therefore, the pricing strategy should offer a competitive price and quality product that will influence customer behavior to become satisfied with the brand. Advertising, promotions, and discount pricing should supplement pricing strategies.
From a biblical perspective, it is beneficial for marketers, to be honest in their offerings to customers. Leviticus 19:13 states, Thou shalt not defraud thy neighbor, neither rob him: the wages of him that is hired shall not abide with thee all night until the morning” (King James Bible, 1769/2022). This scripture establishes that dishonesty is inappropriate for anyone, including business leaders and marketers. Dishonest pricing and misleading marketing approaches should not be a part of any business strategy. Risner et al. (2015) stated that pricing decisions remain challenging for Christians. “ Christians trying to exercise biblical faithfulness in marketing may find themselves in challenging situations when trying to decide which characteristics are appropriate bases for adjusting prices and whether or not customers should be educated about such practices” (Risner et al., 2015, p. 103). Therefore, Risner et al. proposed using the just price concept in which the cost price for the product with enough profit to sustain business growth should be the first pricing strategy. They also suggested using fair pricing, profit maximization, and value-based pricing to set baseline product pricing. Furthermore, relationship building, respect, honesty, love, transparency, and marketing ethics be employed to ensure that the customer feels valued and the product is priced to reflect its quality.
References
Ali, B. J., & Anwar, G. (2021). Marketing Strategy: Pricing strategies and its influence on consumer purchasing decision. Ali, BJ, & Anwar, G.(2021). Marketing Strategy: Pricing strategies and its influence on consumer purchasing decision. International journal of Rural Development, Environment and Health Research, 5(2), 26-39.
Bijakšić, S., Markić, B., & Bevanda, A. (2017). Expert pricing system as part of marketing mix. Informatologia, 50(3-4), 141-150.
Bui, T. Q., Nguyen, H. V., & Pham, N. T. (2017). The effects of selected marketing mix elements on customer-based brand equity: The case of coffee chains in vietnam. Practices and Research in Marketing, 8(1), 38.
Jedin, M. H. b., & Balachandran, I. a. (2021). Marketing mix elements and customer service satisfaction: Empirical evidence in the Malaysia edutainment theme park industry. Services Marketing Quarterly, 42(1-2), 93-107. https://doi.org/10.1080/15332969.2021.1947087Links to an external site.
King James Bible. (2022). King James Bible Online. https://www.kingjamesbibleonline.org/(Original work published 1769)
Othman, B., Weijun, H., Huang, Z., Rashid, W. N., Xi, J., & Yuan, F. (2021). The effect of service marketing mix elements and customer retention towards clothing store brands in China. Industria Textila, 72(4), 388-397. https://doi.org/10.35530/IT.072.04.1777Links to an external site.
Mesak, H. I., Bari, A., & Ellis, T. S. (2020). Optimal dynamic marketing-mix policies for frequently purchased products and services versus consumer durable goods: A generalized analytic approach. European Journal of Operational Research, 280(2), 764-777.
Ramin, B. K., Aboulfazli, A., & Isakhajelou, R. (2015). Ranking the most effective marketing mix elements on the sales of Javid Darb company products: an AHP technique. Journal of International Studies, 8(2)https://doi-org.ezproxy.liberty.edu/10.14254/2071-8330.2015/8-2/14Links to an external site.
Risner, J. R., Eames, R. H., & Betts, T. A. (2015). Common grace and price discrimination: A motivation toward authentic relationship. Journal of Markets & Morality, 18(1).
Thabit, T. H., & Raewf, M. B. (2018). The Evaluation of Marketing Mix Elements: A Case Study. International Journal of Social Sciences & Educational Studies, 4(4), 100-109. https://doi-org.ezproxy.liberty.edu/10.23918/ijsses.v4i4p100
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