(a) What is pricing? (b) Explain marketing concept (c) List and explain the four elements of marketing mix.

Answer Details

(a) What is pricing?

Pricing is the process of determining the amount of money (the price) that a seller charges a buyer in exchange for a product or service. It involves fixing a value that covers the cost of production, yields a reasonable profit, and is acceptable to the target customer.

(b) Marketing concept

The marketing concept is a business philosophy which holds that the key to achieving organizational goals is to identify the needs and wants of target customers and satisfy them more effectively and efficiently than competitors do. It puts the customer at the centre of all business activity, so the firm produces what it can sell rather than trying to sell what it produces, and earns profit through customer satisfaction.

(c) The four elements of the marketing mix (4 Ps)

1. Product: The good or service offered to satisfy customer needs. It covers quality, features, brand, design, packaging and after-sales service.
2. Price: The amount of money customers pay for the product. It covers pricing strategies, discounts, credit terms and allowances.
3. Place (Distribution): The channels and activities that make the product available to customers at the right place and time, including transport, warehousing and choice of middlemen.
4. Promotion: The communication activities used to inform and persuade customers to buy, such as advertising, personal selling, sales promotion and publicity.