Introduction
As one of the components of the marketing mix, price is a factor that largely determines such critical characteristics as demand and profitability. The ability to form a competent pricing policy and use relevant methods of market data analysis allows sellers to achieve sustainable sales. Moreover, related tasks are solved, for instance, increasing the competitive advantage and expanding the customer base, which makes the price one of the key components of the marketing mix. The analysis of relevant sources describing the price factor can help identify its role in building sales approaches and mechanisms for creating effective and profitable value propositions.
Analysis of Articles
Customer Value Propositions in Business Markets
One of the articles that discuss price as a critical marketing tool is the work by Anderson et al. (2006). By focusing on effective value propositions and their design features, the researchers draw attention to the fact that, in most cases, it is almost impossible to find an ideal strategy for attracting attention that would resonate with all customers without exception (Anderson et al., 2006). In this case, additional methods of influencing buying interest are applied, and the price is one of the available options to attract target consumers’ attention. While classifying value propositions, the authors mention discounts, price cuts, and other incentives designed to reach the largest possible audience (Anderson et al., 2006). As a result, unique promotion strategies are built, which is largely the merit of an effective pricing policy.
Business performance is a set of decisions, including those related to the formation of prices for relevant goods and services. According to Anderson et al. (2006), who give examples of weak promotion strategies, none of the development paths can be successful if the firm is operating at a loss. At the same time, as Zhulina (2018) argues, the examples of Bill Gates, Andrew Carnegie, and other prominent entrepreneurs and marketers prove that philanthropy as one of the incentives for business development can be relevant, and even price cuts do not always hurt business outcomes. Therefore, it is essential to note that the pricing policy can be flexible, and the optimal ways of its formation depend on various factors.
Distinctiveness, measurability, and sustainability, as the key factors that, according to Anderson et al. (2006), must define value propositions, cannot be implemented without taking into account the pricing strategy. Any monetary transactions inevitably affect market positions, and the task of any entrepreneur is to maintain a reliable balance of costs and profits. Thus, price coordination occupies one of the key positions in the business and marketing project management system.
Getting Brand Communities Right
Another article that mentions a price in the context of marketers’ targeted work to create effective value propositions is the work by Fournier and Lee (2009). The authors study examples of different promotional campaigns and seek to debunk the myths that are commonly associated with brand communities (Fournier & Lee, 2009). Particular attention is paid to the differences between marketing and business practices, the role of promotion in entrepreneurial strategies, brand strength, and some other aspects. Due to a comprehensive assessment of myths, a comprehensive opinion is formed about brand communities and the methods of optimal interaction with target consumers.
A special focus on online promotion algorithms allows for uncovering the best strategies for strengthening brands. According to Fournier and Lee (2009), by using social media, marketers have additional opportunities to analyze and implement rational pricing policies. This factor is relevant not only to sellers but also to consumers. Coughlan and Goldman (2017) provide an example of business activities in the early days of online selling and note the price transparency that is characteristic of sales on the Internet. As a result, by utilizing online promotion channels, entrepreneurs can count on open communication, but these sites cannot be considered platforms for pricing manipulation.
Flexibility in control over business strategies is emphasized as one of the critical principles for achieving business growth. Fournier and Lee (2009) describe brand empowerment tools and argue that consumers create demand, not sellers. This is relevant to various areas of work, including in the context of pricing policies, since, as Pomering (2017) remarks, prices can be reduced to increase demand, which is consistent with the idea of ​​flexibility in promotion management. As a result, the effectiveness of marketing campaigns is largely dependent on the price factor, which, however, can and should be adaptive but not fixed.
Conclusion
The review of relevant academic sources proves that price, as a component of the marketing mix, is one of the main elements of this framework and allows for creating effective value propositions. At the same time, as the analysis shows, errors in the regulation of this criterion are fraught with a drop in demand and competitive barriers. According to Keller and Alsdorf (2012), trying to keep the price of a product or service high at all costs is indicative of the salesperson’s inexperience and inflexibility. The ability to adapt this element of the marketing mix to current conditions is a significant factor in successful market activities.
References
Anderson, J. C., Narus, J. A., & Van Rossum, W. (2006). Customer value propositions in business markets. Harvard Business Review, 84(3), 90-99.
Coughlan, A., & Goldman, E. (2017). Mary Kay Inc.: Direct selling and the challenge of online channels. Kellogg School of Management Cases, 1(1), 1-23. Web.
Fournier, S., & Lee, L. (2009). Getting brand communities right. Harvard Business Review, 87(4), 105-111.
Keller, T. & Alsdorf, K. (2012). Every good endeavor: Connecting your work to God’s work. Penguin Random House.
Pomering, A. (2017). Marketing for sustainability: Extending the conceptualization of the marketing mix to drive value for individuals and society at large. Australasian Marketing Journal, 25(2), 157-165. Web.
Zhulina, A. (2018). Performing philanthropy from Andrew Carnegie to Bill Gates. Performance Research, 23(6), 50-57. Web.