Definition of price

In ordinary usage, price is the quantity of payment or compensation given by one

party to another in return for goods or services.
In modern economies, prices are generally expressed in units of some form of
currency. (For commodities, they are expressed as currency per unit weight of the
commodity, e.g. Euros per kilogram.) Although prices could be quoted as quantities of other
goods or services this sort of barter exchange is rarely seen. Prices are sometimes quoted
in terms of vouchers such as trading stamps and air miles. In some circumstances,
cigarettes have been used as currency, for example in prisons, in times of hyperinflation,
and in some places during World War 2. In the black economy, barter is also relatively
common.

A value that will purchase a definite quantity, weight, or other measure of a good

or service.
As the consideration given in exchange for transfer of ownership, price forms the
essential basis of commercial transactions. It may be fixed by a contract, left to be
determined by an agreed upon formula at a future date, or discovered or negotiated during
the dealings between the parties involved. In commerce, price is determined by what (1)
a buyer is willing to pay, (2) a seller is willing to accept, and (3) the competition is allowing
to be charged. With product, promotion, and place of marketing mix, it is one of
the business variables over which organizations can exercise some degree of control. It is
a criminal offense to manipulate prices (see price fixing) in collusion with other suppliers,
and to give a misleading indication of price such as charging for items that are reasonably
expected to be included in the advertised, list, or quoted price. Also called sale
price and selling price.
What is marketing?

Marketing is "the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large."
For business to consumer marketing it is "the process by which companies create
value for customers and build strong customer relationships, in order to capture value
from customers in return". For business to business marketing it is creating value,
solutions, and relationships either short term or long term with a company or brand. It
generates the strategy that underlies sales techniques, business communication, and
business developments. It is an integrated process through which companies build
strong customer relationships and create value for their customers and for themselves.

The 7 Ps of Marketing

Product

To begin with, develop the habit of looking at your product as though you were an
outside marketing consultant brought in to help your company decide whether or not it's in
the right business at this time. Ask critical questions such as, "Is your current product or
service, or mix of products and services, appropriate and suitable for the market and the
customers of today?"

Whenever you're having difficulty selling as much of your products or services as

you'd like, you need to develop the habit of assessing your business honestly and asking,
"Are these the right products or services for our customers today?"

Is there any product or service you're offering today that, knowing what you now
know, you would not bring out again today? Compared to your competitors, is your product
or service superior in some significant way to anything else available? If so, what is it? If
not, could you develop an area of superiority? Should you be offering this product or
service at all in the current marketplace?

Prices

The second P in the formula is price. Develop the habit of continually examining and
reexamining the prices of the products and services you sell to make sure they're still
appropriate to the realities of the current market. Sometimes you need to lower your
prices. At other times, it may be appropriate to raise your prices. Many companies have
found that the profitability of certain products or services doesn't justify the amount of
effort and resources that go into producing them. By raising their prices, they may lose a
percentage of their customers, but the remaining percentage generates a profit on every
sale. Could this be appropriate for you?

Sometimes you need to change your terms and conditions of sale. Sometimes, by
spreading your price over a series of months or years, you can sell far more than you are
today, and the interest you can charge will more than make up for the delay in cash
receipts. Sometimes you can combine products and services together with special offers
and special promotions. Sometimes you can include free additional items that cost you very
little to produce but make your prices appear far more attractive to your customers.

In business, as in nature, whenever you experience resistance or frustration in any

part of your sales or marketing activities, be open to revisiting that area. Be open to the
possibility that your current pricing structure is not ideal for the current market. Be open
to the need to revise your prices, if necessary, to remain competitive, to survive and thrive
in a fast-changing marketplace.

Promotion

The third habit in marketing and sales is to think in terms of promotion all the time.
Promotion includes all the ways you tell your customers about your products or services
and how you then market and sell to them.

Small changes in the way you promote and sell your products can lead to dramatic
changes in your results. Even small changes in your advertising can lead immediately to
higher sales. Experienced copywriters can often increase the response rate from
advertising by 500 percent by simply changing the headline on an advertisement.

Large and small companies in every industry continually experiment with different
ways of advertising, promoting, and selling their products and services. And here is the
rule: Whatever method of marketing and sales you're using today will, sooner or later, stop
working. Sometimes it will stop working for reasons you know, and sometimes it will be for
reasons you don't know. In either case, your methods of marketing and sales will
eventually stop working, and you'll have to develop new sales, marketing and advertising
approaches, offerings, and strategies.

Place

The fourth P in the marketing mix is the place where your product or service is
actually sold. Develop the habit of reviewing and reflecting upon the exact location where
the customer meets the salesperson. Sometimes a change in place can lead to a rapid
increase in sales.
You can sell your product in many different places. Some companies use direct selling,
sending their salespeople out to personally meet and talk with the prospect. Some sell by
telemarketing. Some sell through catalogs or mail order. Some sell at trade shows or in
retail establishments. Some sell in joint ventures with other similar products or services.
Some companies use manufacturers' representatives or distributors. Many companies use
a combination of one or more of these methods.

In each case, the entrepreneur must make the right choice about the very best
location or place for the customer to receive essential buying information on the product or
service needed to make a buying decision. What is yours? In what way should you change
it? Where else could you offer your products or services?

Packaging

The fifth element in the marketing mix is the packaging. Develop the habit of
standing back and looking at every visual element in the packaging of your product or
service through the eyes of a critical prospect. Remember, people from their first
impression about you within the first 30 seconds of seeing you or some element of your
company. Small improvements in the packaging or external appearance of your product or
service can often lead to completely different reactions from your customers.

With regard to the packaging of your company, your product or service, you should
think in terms of everything that the customer sees from the first moment of contact with
your company all the way through the purchasing process.

Packaging refers to the way your product or service appears from the outside.
Packaging also refers to your people and how they dress and groom. It refers to your
offices, your waiting rooms, your brochures, your correspondence and every single visual
element about your company. Everything counts. Everything helps or hurts. Everything
affects your customer's confidence about dealing with you.

When IBM started under the guidance of Thomas J. Watson, Sr., he very early
concluded that fully 99 percent of the visual contact a customer would have with his
company, at least initially, would be represented by IBM salespeople. Because IBM was
selling relatively sophisticated high-tech equipment, Watson knew customers would have
to have a high level of confidence in the credibility of the salesperson. He therefore
instituted a dress and grooming code that became an inflexible set of rules and regulations
within IBM.

As a result, every salesperson was required to look like a professional in every

respect. Every element of their clothing-including dark suits, dark ties, white shirts,
conservative hairstyles, shined shoes, clean fingernails-and every other feature gave off the
message of professionalism and competence. One of the highest compliments a person
could receive was, "You look like someone from IBM."

Positioning

The next P is positioning. You should develop the habit of thinking continually about
how you are positioned in the hearts and minds of your customers. How do people think
and talk about you when you're not present? How do people think and talk about your
company? What positioning do you have in your market, in terms of the specific words
people use when they describe you and your offerings to others?

In the famous book by Al Reis and Jack Trout, Positioning, the authors point out that
how you are seen and thought about by your customers is the critical determinant of your
success in a competitive marketplace. Attribution theory says that most customers think of
you in terms of a single attribute, either positive or negative. Sometimes it's "service."
Sometimes it's "excellence." Sometimes it's "quality engineering," as with Mercedes Benz.
Sometimes it's "the ultimate driving machine," as with BMW. In every case, how deeply
entrenched that attribute is in the minds of your customers and prospective customers
determines how readily they'll buy your product or service and how much they'll pay.

Develop the habit of thinking about how you could improve your positioning. Begin
by determining the position you'd like to have. If you could create the ideal impression in
the hearts and minds of your customers, what would it be? What would you have to do in
every customer interaction to get your customers to think and talk about in that specific
way? What changes do you need to make in the way interact with customers today in order
to be seen as the very best choice for your customers of tomorrow?

People

The final P of the marketing mix is people. Develop the habit of thinking in terms of
the people inside and outside of your business who are responsible for every element of
your sales and marketing strategy and activities.

It's amazing how many entrepreneurs and businesspeople will work extremely hard
to think through every element of the marketing strategy and the marketing mix, and then
pay little attention to the fact that every single decision and policy has to be carried out by
a specific person, in a specific way. Your ability to select, recruit, hire and retain the proper
people, with the skills and abilities to do the job you need to have done, is more important
than everything else put together.
 In his best-selling book, Good to Great, Jim Collins discovered the most important
factor applied by the best companies was that they first of all "got the right people on the
bus, and the wrong people off the bus." Once these companies had hired the right people,
the second step was to "get the right people in the right seats on the bus."

To be successful in business, you must develop the habit of thinking in terms of

exactly who is going to carry out each task and responsibility. In many cases, it's not
possible to move forward until you can attract and put the right person into the right
position. Many of the best business plans ever developed sit on shelves today because the
[people who created them] could not find the key people who could execute those plans.