a) One reason why price decisions are an important part of the marketing is that it has a huge

a ect on pro ts and market share. Pricing decisions can impact a company's market share. Using
penetration pricing which is to set the initial prices low to gain market share, can help new
products enter the market and capture a signi cant customer base. However, maintaining higher
prices may be a strategy for brands that are already known to people as consumers would be
willing to pay high prices to get a certain good or service. If prices are set low to a new high
quality product, people could think that the company is scamming people, which would severally
decrease the number of sales and the growth stage of the product would not even happen
therefore market share would not increase.

Another reason why price decisions are an important part of the marketing is that it has an impact
on the level of value added by the business to bought-in components. If the company needs to
make a lot of pro ts to pay employees, rent etc…, they will need to gain more pro t, meaning that
they would increase the di erence between the bought-in products and the sold good. If the
business’ goal is to increase their market share, they will have to prioritise the revenue of the
product. So the added value on sold good really depends on the goals of the business.

b) One factor a mobile cell phone maker should consider before setting the retail price for a new
range of smartphones are how much they bought the goods for from the manufacturer. If the retail
store buys the good in bulk the amount of money per product will be less than if it is bought one
by one. This means that the retail store would could add value a lot easier as the normal price at
which the market sells is going to be higher than the bought in product. They could even make it
cheaper to attract more consumers, and also increase their market share. Moreover, if selling at
the same price as other companies, they would still make pro t as they bought the goods in bulk
which is always cheaper per unit.

Another factor a mobile cell phone maker should consider before setting the retail price for a new
range of smartphones is how much the competitors are pricing the same phones, either the real
store uses competitive pricing which is to set the price of the phones to about the same price as
other competitors or using penetration pricing which is to o er a very low price to the phones
which could make them seen as low quality and risk not making any sales, but could also make
sales if they standout being a trusted company and not being a scam. If using competitive pricing,
the retailer will make sales easier as the product will seem more realistic and authentic.
Furthermore, this would make the consumers think that the phone is coming directly from the
actual manufacturer of the company that launched the phones into the market. This a ect on real
and authenticity will for sure make the retail store successful, in terms of pro t and market share.

To evaluate, I think that the most important factor to consider is the how much the phones cost
from the manufacturer, as it will give a simple but very important information on how much is price
the phones should be sold at. This will make sure the retail store has enough money for xed
costs such as rent, payment of employees in salaries. By doing this, the retail store will have clear
information on what to do which is very time-e cient, so would have a higher advantage over the
market of phone, and have an increase in market share by increased number of phones sold.
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