The importance of pricing in marketing
Price is the first driver of profit, as it is the most important pillar in companies' marketing strategy. With the increase in the number of companies and online stores, price competition has increased, which has made companies give greater importance to pricing when... Marketing For its products, below we explain the importance of pricing in marketing and the extent of its impact on the marketing strategy.
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The importance of pricing in marketing
Pricing can become a powerful tool in the company's marketing strategy, as it contributes to attracting consumer interest and highlighting the brand's products, which works to increase sales. The importance of pricing in the marketing strategy also includes the following:
- Pricing helps establish guidelines for marketing management to develop the appropriate strategy for market variables.
- Price reflects the purchasing power of the market, so pricing is one of the most important steps that determine the standard of living for consumers. There is an inverse relationship between prices and purchasing power. The lower the prices, the greater the purchasing power of consumers.
- Price is one of the powerful weapons that can be used against competitors. When price is used as a weapon in a company's marketing strategy, it will have a great opportunity to outperform competitors and seize control of the market.
- Profits depend greatly on the pricing plan followed by the company, as price is one of the most flexible marketing variables, so companies use pricing as a variable strategy depending on the market direction, so it can be used as a defensive or offensive strategy.
- Pricing is also important because it is one of the factors that affect the company's marketing decisions, as price affects two directions of decisions: the first concerns setting the price of the new product, and the second concerns adjusting the price of a product to suit the market situation.
- Companies use pricing in different ways depending on the marketing program, such as using a demand-oriented pricing strategy, a cost-oriented pricing strategy, or a competition-oriented pricing strategy.
- Price is combined with other marketing variables so that pricing is determined accurately and carefully, as the price directly affects a product when it is displayed in the market of another similar product, so the price of the product must be determined based on its features and accompanied by a strong marketing campaign.
- The price must be determined according to the value offered and the perceived value of the product and its quality. If the price of the product is low and its features are better than the competitor, customers may think that the product is of low quality, so the company must market the product more clearly and highlight its features and the value of its brand.
- Prices are determined in coordination with marketers, as most companies seek to give higher profit margins to marketers in order to strongly promote these products.
Pricing and online marketing
Pricing is integrated into e-marketing via the Internet, and the integration is done in three different ways:
- Include pricing data in marketing
In order for your marketing campaign to be evaluated correctly, you will have to include pricing data for the product you are promoting in the marketing campaign, and not including the price may harm the quality of the marketing.
- Using pricing data as an input to marketing
Pricing is integrated into online marketing by using pricing data as a fixed input into marketing. In this way, integration ensures that the marketing budget is consistent with the specific pricing of the products. Integration also enables you to predict the extent of the success of the marketing campaign as the price rises and falls, which greatly helps in adjusting the budget. And keep pace with market changes.
- Using pricing as a dynamic input to marketing
When using pricing as one of the dynamic inputs, companies will achieve the ideal balance between price and marketing success, as they will not be able to achieve effectiveness and success of the marketing campaign except when the dynamic inputs are integrated with marketing, including pricing.
Hence, the importance of pricing in marketing comes from the impact of pricing on marketing campaigns, as through pricing it is possible to understand the full context of the marketing campaign, and the ability to adjust the marketing budget in a flexible and proactive manner to improve the sales process according to product pricing and market movement.
