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Class 12 Marketing Price Detailed Notes

The document discusses the concept of price in marketing, defining it as the monetary value exchanged for a product or service, which influences demand and profitability. It explores the relationship between price and other elements of the marketing mix, factors affecting pricing decisions, and various pricing strategies and methods. Additionally, it includes previous year questions related to pricing in marketing.

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124 views

Class 12 Marketing Price Detailed Notes

The document discusses the concept of price in marketing, defining it as the monetary value exchanged for a product or service, which influences demand and profitability. It explores the relationship between price and other elements of the marketing mix, factors affecting pricing decisions, and various pricing strategies and methods. Additionally, it includes previous year questions related to pricing in marketing.

Uploaded by

bunsingh27
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Class 12 Marketing - Chapter 2: Price

1. Meaning of Price & Pricing in Marketing


Price refers to the amount of money a buyer pays to acquire a product or service. It is a critical component of
the marketing mix and directly influences demand, sales, and profitability.

Key Points:
- **Definition**: Price is the exchange value of a product or service in monetary terms.
- **Importance**: Determines revenue, profitability, and market position.
- **Right Pricing**: A balance between affordability for customers and profitability for businesses.

2. Relationship Between Price & Other 3 P's of Marketing Mix


The **Marketing Mix (4Ps)** includes Product, Price, Place, and Promotion. Price is interconnected with:

- **Product**: Pricing reflects the quality and uniqueness of the product.


- **Place (Distribution)**: Prices vary based on geographic regions and supply chain costs.
- **Promotion**: Discounts, special offers, and psychological pricing strategies affect sales.

3. Significance of Pricing for Consumers, Firms & Market


- **For Consumers**: Determines affordability and product perception.
- **For Firms**: Directly influences profitability and competitive advantage.
- **For Market**: Pricing affects demand-supply balance, inflation, and economic stability.

4. Factors Affecting Product Pricing


**Internal Factors:**
- **Cost of Production**: Raw material, labor, and overhead costs impact pricing decisions.
- **Business Objectives**: Profit maximization, market penetration, or customer retention goals.
- **Brand Image & Product Differentiation**: Higher prices for premium brands.

**External Factors:**
- **Market Demand**: Higher demand allows higher pricing.
- **Competition**: Prices are influenced by competitors' pricing strategies.
- **Government Policies & Taxes**: GST, tariffs, and legal restrictions impact pricing.
- **Economic Conditions**: Inflation, recession, and currency fluctuations play a role.

5. Types of Pricing Strategies


- **Demand-Oriented Pricing**: Price is based on consumer demand and purchasing power.
- **Cost-Oriented Pricing**: Price is set by adding a profit margin to the cost.
- **Competition-Oriented Pricing**: Price is set based on competitors' pricing.
- **Value-Based Pricing**: Price is determined by the perceived value of the product.
Class 12 Marketing - Chapter 2: Price

6. Pricing Methods
- **Cost-Plus Pricing**: Adding a fixed percentage profit to the total cost.
- **Penetration Pricing**: Setting a low price initially to attract customers.
- **Skimming Pricing**: High price at the start, lowering over time.
- **Psychological Pricing**: Using prices like Rs. 99 to influence consumer perception.
- **Dynamic Pricing**: Adjusting prices based on real-time demand and supply.

7. Previous Year Questions (PYQs)


1. Define price and explain its significance in marketing.
2. Explain the relationship between price and other elements of the marketing mix.
3. Discuss the factors affecting pricing decisions with examples.
4. Differentiate between demand-oriented and cost-oriented pricing.
5. What is price skimming? Explain with an example.
6. Explain psychological pricing and its impact on consumer behavior.

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