What is the difference between price and pricing?
Amongst the major elements of marketing mix, pricing holds a key place. A right product at right place with effective communication cannot make a sale possible until and unless it is suitably priced. Unlike, other elements of marketing-mix, price is quantitative in nature. It is the only element that generates revenue for the firm. Other elements like product, place and promotion are cost element. Price is a sharp tool in the hands of the marketer by which he can attract the consumers and meet the competition.
Growth and survival, prosperity and profitability, brand image and firm’s image is influenced to a great extent by pricing decisions. The decision regarding price are influenced by a host of factors such as, production cost, demand and supply, nature and type of competition, government rules and regulations, legal constraints product, channel of distribution, promotion etc.
Price and pricing are different terms. While pricing is the function of translating into quantitative terms the value of product or services by the marketing manager before it is offered for sale, price is the exchange value of any product or service, which can be expressed in the form of money.
It is the amount one pays for a good or service or an idea. Pricing is the art of translating into quantitative terms the value of the product to customers. Price must be such that it is highly perceptible to customers as it significantly affects their buying decisions.
The importance of pricing normally varies from one industry to another. For some products, price is a determinant factor in buying while for others it is an influencing factor. Though in modern times, non-price factors play a crucial role in buying decisions, price has in no way occupied a less significant place.
Price refers to the value of a product which a buyer is willing to pay and the seller is willing to accept. In this way, the level of satisfaction both of the buyer and the seller is greatly influenced by the price.
According to D.W. Cravens, G.E. Hills and R.B. Woodruff “Pricing is the process of setting objectives, determining the available flexibility, developing strategies, setting prices and engaging in implementation and control”.
According to W.J. Stanton, M J. Etzel and B.J. Walker “Price is the amount of money and/or other items with utility needed have acquired a product”.
Thus, the term price is relative in terms of variables in the entire marketing programme. It is the sum total of every cost related to the product, plus the profit margin of the seller.
