Part 4 of 9: PRICE – from the 9 P's of Marketing*

How does “Price” fit into the 9 P’s of Marketing?

In sophisticated Marketing there are more than the classic four P’s of Marketing, but “Price “ is in the four P’s and is one of the important elements under the nine P’s of Marketing.

Can your customers, clients or users tell the difference between you and your competition? Cam price be a key differentiator?

Most people wouldn’t think of “price” or pricing as a variable and a way to differentiate your product or service. Price is often thought of only as a result of “cost of goods” plus profit. In sophisticated marketing strategies, pricing can be very impactful as a differentiator.

In summer 2017, Amazon acquired the upscale chain Whole Foods for $13.7 billion.

So what did Amazon do immediately? It cut prices on a variety of different products and drove store traffic. Interestingly, there was so much publicity by the media which generated an increase in promotion, too.

The big question is will these price cuts be sustained and will they change shopper behavior? (Brief Update: In it’s most recent annual report, after less than a quarter of ownership by Amazon, a declining sales trend was reversed and sales were up 4.4%.)

Let’s look more closely at “Price” one of the nine elements or components:

Price/Pricing are all aspects regarding pricing. The amount of money a consumer is willing to pay to obtain the product. Pricing includes wholesale/retail/promotional prices, discounts, trade-in allowances, quantity discounts, credit terms, sales and payment periods and credit terms. Pricing decision making also involves adjusting prices concerning the competitive environment, economic situations and involve buyer perceptions.
“Pricing” is the sum of the values that customers exchange for the benefits of having or using the product or service.
Examples:
- “Believe it: there are four ways to increase sales revenue:
  1. Increase the frequency of transactions per customer (“People.”)
  2. Increase the number of your customers.
  3. Increase average transaction size.
  4. Raise your prices.

Be sure to look at competing for the customer and not against your competition. You can as a company make your product stand out by lowering the price but if you cut your margin and earn less, that won’t help your bottom line. It will shrink it Under “Price,” your firm can lower the price to the point it separate your company from the competition.

You can raise your price to create differentiation or exclusivity. It’s not always easy, but think of elite brands like Rolex, Bently, or Tiffany. If the prices drop too low, the brand is actually devalued.

2 Guyz Brian adds that with pricing, there can only be one “lowest price” leader. Fighting for the lowest price can also lead to fighting to win at failing, if profits are not maintained.

For more Marketing insights, ideas, concepts and Marketing solutions: Go to Londremarketing.com and look under “Articles and Resources” and the 9P’s/Nine P’s ©2007. Specifically you will find them detailed at 9P’s/Nine P’s or Nine P’s/9P’s of Marketing.