Market value is the amount for which something can be sold in a given market
Setting the right price is important for effective marketing. If we look at the marketing mix (product,price,promotion and place) price is the only one that brings money into the business (revenue)
It is also a variable of the mix that can change very quickly. For example responding to competitors price change.
The price of a product can be seen as the value of the product, for the consumer, the price is the monetary expression of the value to be enjoyed and benefits recieved by purchasing a product, as compared with other variable items.
If We had to draw a equation out of this then….
(percieved) Value=(percieved) Benefits- (percieved) costs
customers motivation to purchase a product comes from a “need” and a “want”. Another perception comes from the value of the product when it comes to satisfying the need/want that the customer may have. However these perceptions of the value of the product may value depening on the consumer as they each have different wants/needs.
percieved benefits are often largely dependant on personal taste. In order to obtain the maximum possible value from the market, a business may try and segment the market.
A products percieved value can be increased by,
- Increasing the benefits that the product will deliver
- reducing the costs
Obviously cost is important to consumers, therefore businesses need to get the product pricing right.
Factors affecting Demand (within a business)
- price (if there is not perfect competition)
- product research and development
- advertising and sales promotion
- training and organisation of the sales force
- effectiveness of distribution
- quality of after sales-service
factors affecting the demand (outside the business)
- the price of substitute goods and services
- the price of complementary goods and services
- consumers disposable income
- consumers taste and fashions.
sahiljhamb 