Bottle Water

In: Other Topics

Submitted By dreswife1
Words 898
Pages 4
The price variable in the marketing mix is a critical element. Price can, by itself, communicate much about a product or service. For example, what would you think of buying an engagement ring at Bob’s Really Good, But Cheap, Jewelry Store, or for that matter, at a yard sale. Most consumers link price with quality and there are many organizations that carefully reinforce the quality of their product, using price as a surrogate cue (or substitute indicator) for quality. For example, check out the websites of marketers of prestige items and observe how the price variable is used to indicate quality). Check out BMW’s website and watch on of the movies there. (http://www.bmw.com/bmwe/index.shtml).

When the pricing decision is made, the organization must consider several factors. These factors are as follows:

a. Supply (or cost)
b. Demand (or revenue)
c. Perceptions in the marketplace
d. Competition and Competitors’ pricing strategies
e. Government Regulation
f. Company’s desired pricing position

Supply (or cost)

If there is an abundant supply of a product or service, it may not be a candidate for being approached as a product or service for sale. For example, we don’t consider air to breathe as being a commodity we must buy. Of course, that is only because there is a plentiful supply. Of course, in Colorado, many people find that the air supplied by the great outdoors is not sufficient in oxygen, thus, they must buy air that is rich in oxygen by renting oxygen tanks to enhance their respiratory systems. Native Americans had to locate close to a water supply, but didn’t worry about having to purify the water. Hence, time can change most everything, particularly how we perceive certain goods and services as candidates for commercial products. Just a few years ago, people consumed very little bottled water throughout most of the United…...

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