7. Marketing Mix - Price

1. overview 2. planning 3. swot 4. marketing plan 5. marketing mix 6. product
7. price 8. promotion 9. place 10. literature 11. public relations 12. promos
13. advertising 14. sponsorship 15. sales

As has been already stated in, price is one of the four Ps in the marketing mix and is yet another weapon in the marketing armoury. The price you decide to charge for a product or service can support its positioning. Likewise a pricing which appears to be out of synchronisation with the product and with the other marketing elements will only confuse customers and hence lead to lower sales.

A situation I commonly encounter is where a company bases its selling price on the cost of the product plus an internally agreed percentage or margin. This calculation is done irrespective of product or market sector or customer perceived value.


This means that some products are priced too expensively and hence never generate the volume they should, and some products are priced too cheaply and never generate the volume or profit they should.

Also be aware of the salesman's anecdotal evidence that price seems to be the only factor that a customer considers in making a purchasing choice. A huge amount of research has been done on this subject. Whereas the salesman will generally place price as the number 1 factor in a list of factors such as delivery, service backup, functionality, etc; customers will place it as only the number 3 or number 4 factor.

The production of good sales presentation material can help enormously here in that the salesman can be guided to promote other positive aspects of the product or service on offer and hence build up its perceived value to customer. If there is no attempt by the company to influence the sales story then invariably it will be driven by the customer and this can lead very quickly to a debate on price and nothing else.

To take this argument a little further it is quite possible to sell exactly the same product to two different customers and charge radically different prices. This is simply because the customers operate in different market sectors and value the product quite differently.

pricing policy

Do you have a clearly defined and written pricing policy?

I am always surprised by the number of companies who do not seem to have thought through all eventualities and decided how to charge for the various scenarios. A well thought through strategy can give you the ability to sell the same products at vastly different prices to different market sectors without upsetting any of your customer base.

Is your product a loss leader? By offering a product at a greatly reduced price you can generate a lot of interest from customers in a relatively short period of time and give yourself the opportunity to generate more business from those customers in the fullness of time. It can even be worth your while to make a loss on this product.

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The following are a number of testimonials from satisfied clients. We are really pleased to receive these testimonials, and proudly list them here.

Thanks for the website Ian.
As you stated, I have had a steady stream of enquiries since setting me up on the internet.
Morning Ian, just a short note to say 'thankyou' for the work on my website. Not only am I pleased with the way it looks, but I could not believe it when I got my first enquiry from it only a few days after its completion. All you said would happen has indeed happened.
Thank you very much for your kind help. It is really a good advice for my marketing plan.

Thanks and best regards,
Hi Ian Just a short note to tell you we have had a very good season, an excellent sales increase so we should be ok now the autumn is here and going very soon into Winter.. . . . . . . . .
Thanks Ian. The website has certainly increased our Bookings and we look forward to next year.
Best Wishes
I am not really interested in getting back in to PPC as it cost a lot of money last time for not a lot of return. We have been without it for over a year and what you are doing is still increasing visits and turnover on the site.
Sports Outlets
Just a quick note to say I’m very interested in maintaining the website you have completed a marvellous job of so far. We are already noticing a complete change and receiving a lot higher internet inquires.
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Hello Ian, came across your website via a Google search and wanted to say how impressed I am! The marketing plan template arrived within seconds of my request - it is clear, tremendously helpful and has provided me with the structure I desperately lacked as I prepare to kick off my new business on 1st September! A really super service, am sure I will be in touch again over the coming weeks to discuss other elements of your offer.

Thanks and regards

....... I have also noticed the success of extra clicks! Business is also up by at least 15 percent from last year. Regards
Owner (Dry Cleaners)

I would just like to bring a ray of sunshine to your day (well it did for me).
Since we started to work with Ian Smith, our Adwords guru, our results have improved impressively. These figures are the average across the board, ..
Our Click through rate has gone from 1% to a very credible 4.5%
Our average cost per click has dropped from 87p to 63p (just remember some clicks are still £2+).
Our average position has gone from 5.4 to 4.6
So all in all a very good result and with further input we hope to do even better.
Interior Design Retailer