Sports Marketing Essay

Prices in a market economy are very important. Price allows us to give out goods appropriately to those who are able to pay.

Competition within the industry as well as market supply and demand conditions set the price of products sold.

Internal influence: They are factors which businesses have some degree of control like location, management and business culture.

Internal factors are establishing prices and marketers ought to take into consideration the importance and significance of a number of factors which is the outcome of the organizations choices, results, and actions. These factors are manageable by the organization and they may be modified, if need be. In spite of this, making a swift transformation is not always the answer or the quick fix. For example, product pricing is determined or influenced by the productivity of an industrial facility. The salesperson realizes that rising productivity can decrease of expense of manufacturing every product and therefore lets the salesperson to possibly reduce the price. External factors are not managed by the organization but then again it will influence the choices of pricing. Being able to better comprehend these factors would entail the marketer conduct research to observe and evaluate everything that is going on in all of the markets that the organization works for because of the influences of these factors can differ within the market (Factors Affecting Pricing Decision, 2016). External forces that can impact the organization are unmanageable because the organization does not manage them however, the organization can still take action and adjust to their occurrences and effects with the organizations manageable blend of components from the organizations internal setting. The unmanageable influences in the external setting are rivalry, governmental policies and plan, natural influences, social and cultural influences, demographic determinants, and changes within technology (Bright,

External factors that will impact on our operations include competition with other companies (for customers and employees), the economy and the current climate situation. Internal Factors that will impact on our operations include unskilled workers and conflicts between co-workers due to gender or ethnicity discrimination.

Competition within the industry as well as market supply and demand conditions set the price of products sold.

As we all think at times and ask ourselves, how did Wal-Mart become the world’s largest retail chain? Or why is Apple the most valuable technology company even with high priced products? First companies have to understand their market and strategies according to its demand and income level, regardless of whether they intend to offer their products at a low-price or high price. What do you think of when you hear the words “Pricing Strategy”? One of the four major elements of the marketing mix is pricing. A pricing strategy refers to the method companies used to price their products or services. Pricing strategy being with a market analysis of what the ideal product price for a given product of service should be. Either if the business is small or large, they base their products or services on production, labor worked, and advertising expenses. Once these prices and totals are established they then add on a certain percentage to generate a profit. When dealing with pricing strategies it tends to be one of the most critical components of the marketing mix. It cost to produce and design a certain product, and it cost to distribute a product and cost to produce it. When a company chooses a pricing strategy they dramatically impacts the profit margin of their business, and it also determines the pace at which the business can grow.

It’s the external factors which include economic, social, political and legal influences, and technological forces. These factors can refer to the PESTLE factors.The organizations can't control these forces, but they can only be ready for any changes can happen. The macro environment influences on the performances of the industry and on the market.

2. What is the difference between a skimming price strategy and a penetration pricing strategy? Under what circumstances is each most likely to be used?

The role that costing plays in pricing is that cost influence pricing due to the fact that the prices need to reflect the costs in the senses that the price of a product needs to be greater that the original cost to make it so that the business can benefit from the sale. In addition, Pricing decisions are often made when taking into account the decision of time horizon. With time horizons, when a product has a short term price, only the variable costs that are incurred are included in the price. Whereas when a product has a long term price, both the fixed cost and the variable costs are included in the price. The price of a short term product must exceed the variable cost incurred in the manufacture of the product. Whereas when it comes to the pricing of a long term product, the price is decided on the basis on using types of pricing such as cost-based pricing and Target pricing. Illustrated in diagram 1.2 below showing the process of a products life on the market.

Pricing strategy is not a one-size-fits-all proposition. As you define the marketing strategy for your company, including your target market(s), competitive advantages, and overall marketing mix, the range of appropriate pricing strategies emerges. For example, an exclusive, highly specialized product targeted toward upscale consumers would logically be priced at a premium. However, at its point of introduction, it may have to be priced in line with the competition until it is established as the market leader. At the same time, mass-market products may be priced at a lower level. You should consider multiple factors when creating your pricing strategy.

Skimming is another pricing strategy that entrepreneurs can use when deciding pricing. Skimming pricing strategy is often used when a company introduces a unique product into the market with little competition (PG 94). Skimming pricing strategy allows the entrepreneur to set its prices higher than others because the customers have a higher spending power and these customers are willing to pay more than other customers. Also, this strategy is used so that an entrepreneur can retain its profit quicker than normal because of the higher price. When entrepreneurs sets their prices higher this tells potential customers , this higher

On the other hand, buyer component has a significant influence to the change in price. The

Pricing is the value placed on good or service by sales force to some point in time .A price placed in the market will be higher or lower than the value perceived by potential sale force does not really contain the customer‘s orientation necessary to market the product or service .Pricing is major factor that keeps the economy activity. The employment of any or all the factor of production i.e. land labor and capital are dependent upon the price received by each (Stin, 1998).

Price, which is one of the most important elements of the marketing mix, can be difficult to get right. Pricing too high, or low, can negatively impact on customer satisfaction and revenue. Adopting a pricing strategy is necessary to achieve desired sales objectives (Chan & Wong 2005).