The importance of an efficient marketing plan has been fully recognized. The search for a suitable marketing planer or software has already begun. The concerned resources are in place. The time frames have been worked out; competition analysis is already taking shape. Target identification, product dimensions, campaign managements, communication planning are all in place. But has anything been left out? Well yes, a clear pricing strategy has been side lined. The positive enthusiasm and energy towards succeeding could well end in a situation where lack of careful price management could tie you down.
Price or MRP i.e. Maximum Retail Price or sales price is what you get when you sell a product. This sole factor along with its derivative i.e. corresponding profits determines your survival. Charity is great but mismanagement or lack of planning should not be attributed to the same. At no stage should your long-term expenses soar beyond the firm’s earning capacity. Whatever language you use but the only means to survive in a business community is by earning or making profits. This undoubted fact obviously implies a diligent look into the pricing strategy while working out the marketing plan.
Pricing and Marketing??
The link between the two terms is quite strong. The price of your offerings decides the level, kind and scope of your marketing initiatives. The prices themselves are however dependent on various factors, the lower end being marked by your cost while the upper end depends upon the competitors’ offerings and consumer’s willingness to pay.
Setting up a price acts as an important indicator of the firm’s marketing objectives. For instance, deciding the prices in consonance with your competitors, referred to as competitive pricing, is included in the overall marketing strategy to curb competition. Similarly, an exceptionally low price in a specific area or segment to capture the bulk of the market share falls under the preview of penetration strategy. A reliable and an economical product calls for less marketing attention while a high end, high priced product meant for a cream section certainly demands a carefully designed marketing plan to back it up.
The correlation among the two firms though not directly visible, is so strong that any decision in a department cannot be isolated from the other. Budgeting, an important component in devising the marketing plan also works on the earnings and eventual profits earned by a firm which in turn depend upon the pricing strategy.
Priding strategy and marketing planning go hand in hand where organizations are concerned. None can be worked out in isolation. A minor change in one implies a corresponding change in the other. It is hence, impossible to ignore the pricing aspect while making a marketing plan and vice versa, which is rightly so. A clear price definition and cost estimation assists in making more practical marketing plans which in turn help achieve the planned profits for a firm.