Price 
   • Very important element of marketing mix as it determines profit earnt 
    per unit, influences customers decision to buy or not and contibutes 
    to products image. 
    Factors to consider 
    • Disposable income of target market – the price must be 
     affordable and take into account the average disposable 
     income of its target market. 
    • Product image – a price set must reflect the desired image. 
     A luxury, premium or high end branded product should 
     have a high price to suggest exclusivity, luxury or quality. 
    • Competitors – the price should take into account that of its 
     competitors and be in line with the firms chosen product 
     positioning. 
   • Cost – the cost of producing, promoting and 
   selling must be covered whilst yielding a 
   profit for the business. If the cost changes 
   the firm may have to increase price. 
   • Demand – the higher the demand the higher 
   price a firm can charge. A company with a 
   monopoly can charge a higher price due to 
   exclusivity. 
       Pricing strategies 
   • Price skimming – charging a high price for  new and 
    innovative product to recoup R&D expenditure. Used 
    for innovative, new products with a patent or without 
    direct competition
   • Psychological pricing – pricing to reflect a lower cost 
    e.g. €3.99 sounds cheaper than €4
   • Premium pricing – charging a high price to reflect a 
    high quality image 
   Penetration Pricing – this is where a company uses 
    a very low price to gain entry into a market with 
    strong competition. Once a market share has been 
    established and customer base built up the 
    company usually increases its price
   Discriminatory Pricing – different prices are 
    charged to different groupings for the same 
    product in relation to age, economic grouping, 
    time of booking etc.