Answer:
price
Explanation:
Price is the value agreed upon between the buyer and the seller in the sale and purchase process. The product, the other 3 elements of the marketing mix, does not create value for the customer as opposed to the promo and the location, the value is purchased from the customer and transferred to the seller. For this reason, the price is very important to the seller, for the benefit of the pricing policy and for its future activities. Even if the product, advertising and sales channel is poor, you can make money, but if you don't meet the cost, you have no future. Appraisal is perhaps the most difficult task of marketing. Pricing, management and alignment with changing market demands require great sales experience and deep marketing knowledge, market and customer recognition. There are many factors that directly and indirectly affect the price. While production costs, brand value, and market positioning of commodities directly influence prices, competitors' pricing policies and macroeconomic factors are indirectly affected. Companies' pricing policies are based on three different strategies:
1. Production-based strategy:
In this approach, the cost of a commodity (production or purchase), plus a certain percentage of profit, is calculated. This pricing policy is more specific to manufacturing companies and trading companies.
2. Adapting strategies to competitors:
In this approach, the price is determined according to the price of the nearest competitors.
3. Value-Based Strategy:
In this approach, the price is calculated based on the value the customer gives to the customer. As an example, it may be possible to sell more soft drinks on the beaches during the summer.
In economic theory, pricing in pure competitive markets is based on supply and demand. With a simple definition, buyers want to sell the goods at the lowest price, and sellers want to sell at the maximum price. The price of the goods is determined by the agreement between the buyer and the seller. The price may be elastic and non-elastic. If the demand does not change as the price rises, then the price is completely elastic. This is the case in the monopoly market: for example, when the government raises electricity, it does not reduce the use of light in a short time. As demand increases, price elasticity increases as demand increases. In the full elastic price market, a slight increase in prices pushes buyers to compete. In such markets, the goods do not have a brand value, the product meets a single standard, and the buyers are not very demanding about the product. Examples of daily consumer goods, such as bread, water, gasoline, and greens, can serve as an example.
