Marketing

Mix:
Products and
Price
 Product
It refers to the goods and
services produced to satisfy a
customer need and want.

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Brand
★ It refers to the general
impression of a product held
by consumers.

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Branding benefits
★ product recognition
★ easier to launch the product
★ can price higher than less
well-known brands.

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Role of packaging
★ to protect the product
★ to provide information about
the product
★ to help consumers recognise
the product

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Product life cycle
★ Introduction stage
★ Growth stage
★ Maturity stage
★ Decline stage

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Extension strategies
★ finding new markets for the product
★ finding new uses for the product
★ adapting the product or the packaging
to improve its appeal to consumers
★ Increased advertising and other
promotional activities.
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 Price
It refers to the amount paid
by the customer to the
supplier when buying a
good and service.

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Pricing Methods
★ Market skimming
★ Penetration pricing
★ Competitive pricing
★ Promotional pricing
★ Cost-plus pricing

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Example:
Company X produces car batteries. The average
cost of producing a battery is 400 pesos. They want
to make a profit of 150% per unit sold.
The selling price of each battery will need to be:
Price = Cost × (1 + Profit Margin Percentage)
Price = 400(1 + 150%)
= 1,000 pesos
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Try this:
Paulo owns a local grocery store. He buys all of his
goods from the local wholesaler. Paulo uses a mark-
up of 30% on all tinned fruit. He buys tins of fruit
from the wholesaler for $0.40. Calculate the price he
charges in his grocery store for tinned fruit.

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Solution:
Price = Cost (1 + Profit Margin Percentage)

= $0.40 (1 + 30%)
= $.52

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Try this:
Debbie is a clothing designer. She designs one-off
dresses for people to wear on special occasions. The
average cost of making one of her dresses is $80.
Debbie makes a profit of 300% on every dress she
makes and sells. Calculate the price Debbie charges
for her designer dresses.

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Solution:
Price = Cost (1 + Profit Margin Percentage)

= $80 (1 + 300%)
= $320

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 Choosing a pricing method:
▸ Is it a new or existing product?
▸ Is the product unique?
▸ Is there a lot of competition in the market?
▸ Does the business have a well-known brand
image?
▸ What are cost of making and supplying the
product?

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Price Elasticity
of Demand
 Demand Law of Demand
 Says that quantity demanded varies
 The quantity of goods inversely with price, other things constant.
and services consumers  The higher the price, the smaller the
are willing and able to quantity demanded.
buy.
 The lower the price, the larger the quantity
demanded.

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Price Elasticity of Price Inelastic Demand
Demand  This is when the percentage
change in demand (sales) is less
than the percentage change in
 This measures by how price.
much demand (sales) Price Elastic Demand
for a product changes
when there is a change  This is when the percentage
in its price. change in demand is greater than
the percentage change in price.

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Effect on Revenue of changes in price
for products with price elastic demand
and price inelastic demand
Price change Price elasticity of Effect on Revenue
demand

Increase in price Price inelastic demand Increase revenue

Decrease in price Price inelastic demand Decrease revenue

Increase in price Price elastic demand Decrease revenue

Decrease in price Price elastic demand Increase revenue

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