Pricing

Price may be defined as the exchange of goods and services in terms of money. Without price, there is no marketing in the society. Price of a product or service is what the seller feels it worth in terms of money, to the buyer. To perform the marketing job effectively, the management has to set goals first. Before determining the price, the management must decide the objectives of pricing. The market price of a product influences wages, rent, interest and profits. The price is a matter of vital importance to the buyer and seller. The price can decide the success or failure of a firm. By transferring to money economy from barter economy, the importance of price has been increased. Price is a primary source of revenue which all firms try to maximise by expanding markets.

Budget Preparation

The manufacturer has to forecast with the reasonable amount of accuracy in a given period of time in the future. Management will estimate the probable sale in a given period of time. Required rate of production is always decided by the management in order to meet the estimated sales. The management will prepare the purchasing budget by estimating the demand, sales and the probable production. So you can get a very clear idea about the quantity of goods required from the purchasing budget. All these budgets are prepared for one year and one can say that the sales budget and the purchase budget go hand in hand. So a company has to plan the budget very carefully to meet the demands of the people and also to gain profit.

Market Analysis

The company sales may depend on the behaviour of certain market factors. The principal factors which affects the sales may be determined. By studying the behaviours of the factors, forecasting should be made. Correlation is the statistical analysis which analyses the degree of extent to which 2 variables fluctuate with reference to each other. The demand decision makers have to consider price, competitions, advertising, disposal income, buying habits, consumption habits, consumer price index, change in population etc. It is a sound method where the market factor is analysed in detail. But it is costly and time consuming. It is a short term process.

Advertising

Advertising is considered multi-dimensional. It helps in a number of marketing activities. It is a technique of sales promotion. Sales volume is increases by advertising. It helps and supports the salesman in selling the products. Consumer's knowledge about the product is increased by advertising. Advertising helps the consumer save their time in purchasing. It also helps the manufacturers to sell their products. Hence quick selling is possible which leads to more production at less cost. The relationship between wholesalers and retailers is improved through advertising. Advertising introduces new products, stimulates markets regarding the existing product and repeated sales. Thus advertising is advantageous to many people.

Importance of promotion

The important purpose of promotion is to change the location and shape of the demand curve. Creation of demand is one of the functions of selling. But promotion is responsible for the creation of demand. Promotion is an exercse in information, persuasion and influence, which are inter related and if a person is persuaded, he is probably also being informed. Due to increase in the the physical distance between producers and consumers, there is the increase in need for promotion. There is also the increase in the number of potential consumers which increases the problem of market communication. Today consumers give more importance to want-satisfaction rather than to their needs. They are selective in their choice of alternative expenditure.