Commerce

Principle of Marketing: Price as a Marketing Mix

len Alfred Ajibola - Mon, 24th February, 2020 @ 11:00: AM

Topics in Commerce

Principle of Marketing: People as a Marketing Mix and their Importance Principle of Marketing: Positioning as a Marketing Mix Principle of Marketing: Packaging as a Marketing Mix Elements of Promotion in Marketing Mix Principle of Marketing: Promotion as a Marketing Mix Principle of Marketing: Place as a Marketing Mix Principle of Marketing: Price as a Marketing Mix Principles of Marketing: The 7 Ps of Marketing Mix Factors necessary for Division of Labour Disadvantages of Division of Labour Advantages of Division of Labour Outbound Marketing explained Inbound Marketing explained Production - Types of Production Commerce: Definitions and Scopes of Commerce Differences between Balance of Trade and Balance of Payments Balance of Payment Deficit and Balance of Payment Surplus Disadvantages of Foreign Trade Divisions of Foreign Trade Advantages of Foreign Trade


Academic Questions in Commerce

Please check out our Test Your Knowledge page to see all Questions and Answers

Whatever is being marketed must always provide value to its potential consumers.

  • A. True

  • B. False

Which of the following is not a branch of marketing?

  • A. Merchandising

  • B. Promotions

  • C. Forex

  • D. Search Media Optimization

  • E. Social Media Optimization

  • F. Copywriting

Which of the following is not a characteristics of commerce?

  • A. The only aim of commerce is to make profit

  • B. It is a discontinuous process after profit had been made

  • C. It is accompanied with challenges and uncertainties

  • D. It is 100% business and economic activity

  • E. Transaction processes are always involved in commerce

  • F. It connects the process of production and marketing

Which of the following is not a function of commerce?

  • A. Unnecessary in times of emergencies like earthquakes and wars

  • B. Facilitates mass production of goods

  • C. Influences transportation network within and outside a state

  • D. Attempts to satisfy human needs and wants

  • E. Improves the standard of living

  • F. Acts as an online business link between buyers and sellers

One of the following is a form of division of labour.

  • A. Agonistic division of labour
  • B. Antagonistic division of labour
  • C. Mutualistic division of Labour
  • D. Advanced division of labour
  • E. Solitary division of labour
  • F. Occupational division of labour

A place where people buy homogenous goods in large quantities is called _____.

  • A. Wholesaler's Market

  • B. Goods Market

  • C. Products Market

  • D. General Market

  • E. Commodity Market

  • F. Forex Market

Any activity aimed at getting people interested in a company's product or service is termed _____.

  • A. Commerce

  • B. Economics

  • C. Financial Accounting

  • D. Marketing

  • E. Production

  • F. Distribution

Which of the followings isn't a characteristics of commerce?

  • A. Commerce is solely aimed at making profit

  • B. Commerce is 100% business

  • C. Commerce is a discontinuous process because it eventually satisfies human needs

  • D. Commerce is accompanied by uncertainties

  • E. Transaction processes are always done in commerce

  • F. Commerce connects the processes of production and marketing

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Price as a Marketing Mix:

Price refers to an amount of money a consumer is willing to pay for a product or service. It is one of the 7 principles of marketing mix. In addition, it is a crucial factor that will affect the demand and supply of a product. This is true because a very low price may bring about discredit to one's business reputation while an exorbitant price may kick a business out the the market.

Please read on an introduction to the Principle of Marketing Mix here.

Setting up an ideal price for a product is very important for the demand and supply of such product. The process of price setting isn't as simple as it sounds. In fact, the marketing team will need to carry out a survey on the price of similar products before setting the price for their product. To this end, the producer will need to consider various factors. Some of these will include:

  1. Cost and overall expenses during the manufacturing process of the product.
    Please read on the Concept and Types of Cost here.
  2. Level of demand for the product.
    Please read on Demand and Law of Demand here.
  3. Prices from competitors; that is, those who manufactures similar product(s).
    Please read on Supply, Supply Curve and Law of Supply here.
  4. Reputation and perception of the production company by the consumers.
    You can read on Reputation in Civic Education here.
  5. Quality of the producer's product.
  6. The level of competitiveness for the product.
  7. Profit margin of the producer.

From the information gathered, the company should be able to fix the best price for their product which may or may not be too high or too low, depending on your target customers. For instance:

Samsung have got phones that can be sold at various prices. Some of these phones may be sold at N500,000 while the prices of others may be as low as N30,000.

You can read on Promotion as a Marketing Mix here.

This above prices are justified because both suits the customers' value with regards to the phone's quality and customers' financial strength.

Please read on Scale of Preference and Opportunity Cost here.

For online businesses and websites that run adverts on their web pages, the prices charged for each advertisment will include the page and topic on which the advert is placed on the website. For instance, On Len Academy, the prices for an advert placed under the academic subject commerce will vary with another placed on our biology page and topics.

Please read on Advertising and Types of Advertising here.

Other factors that will affect prices for advertisment on websites will include the global internet ranking of the website and the number of traffic generated by the website; that is, the number of internet users that visits the website on a daily basis.

Please read more on Inbound Marketing here.

A common strategy used by small to medium sized business is the price bargain strategy. Through this method, the buyers have the advantage of pricing the product to an amount they are willing to pay for. On the flip side, the sellers may agree on the price, thus selling the product or declining it's sale at that price.

Please read on Consumer Right and Protection here.

Generally, it is of the opinion that low prices equates to lower quality while goods or products with higher prices are of higher quality. This opinion does not always hold true because nowadays, certain sellers can be quite greedy. Such sellers sell inferior quality goods/products at exorbitant prices. Below is a real-life example that took place between my friend (the buyer) and a seller.

  • A friend of mine bought a brand new LG television in a popular market called "Alaba International" located in Lagos, Nigeria. He paid N65,000 for this television. After installation in his house, he discovered that the TV's bluetooth could not pair with his phone's bluetooth (which was also a LG product). It was at this point he realized that the television wasn't an original LG product.

  • Please read on the True Meaning of Honesty explained with its Attributes here.

  • However, he took the television back to where he had purchased it. After expressing his disappointment to the seller; the seller brought out an original LG television (which had an exact physical appearance with the fake he initially bought). He was asked by the seller to pay an extra N7,000 in order to take home the original television, and that he gladly did.

You can read on Place as a Marketing Mix here.

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Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 7 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.


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Amazing facts in Commerce

With Amazon Smile, you can donate 0.5 percent of your purchases to a charity of your choosing

Check it out here

The brewery, Sankt Gallen in Japan, produces a beer called Un Kono Kuro from elephant's dung

North Korea and Cuba are the only countries in the world where you can't buy Coca-Cola

Amazon is an e-commerce website launched in 1995. It did not make any profit for its first seven years.

Amazon's first profit was in 2003. Its founder 'Jeff Bezos' is the richest man in the world as at 2018/2019


NOTABLE POINTS IN Commerce

Marketing is a broad field of study. Below are branches or divisions of marketing:

  • Advertising

  • Search Engine Optimization (SEO)

  • Merchandising

  • Branding

  • Promotions

  • Copywriting

  • Social Media Optimization (SMO)

  • Event planning

  • Customer Relationship Management (CRM)

  • Graphic Design

  • Internet Marketing

Marketing is defined as any activity or process aimed at getting people interested in a company’s product or service.

The processes utilized in marketing can take place via posters, public relations campaigns, handbills, social media, radio and television, buses, walls along the streets, the internet or just anywhere.

Below are some of the branches of marketing:

  • Advertising

  • Search Engine Optimization (SEO)

  • Merchandising

  • Branding

  • Promotions

  • Copywriting

  • Social Media Optimization (SMO)

  • Event planning

  • Customer Relationship Management (CRM)

  • Graphic Design

  • Internet Marketing

Please read more on marketing here

Commerce can be defined as the exchange of goods and services, usually for money and on a large scale that will require the transportation of such goods and services.

Commerce is crucial (important) to the life of any nation for the following reasons:

  1. Commerce facilitates the exchange of goods and services which everyone can enjoy, regardless their location or whether the goods is produced within or outside their country.
  2. Commerce creates an awareness of the existence of goods and services through advertising.
  3. Commerce offers employment to a very large number of people in a nation.
  4. Commerce promotes rapid transfer of both oral and written messages through communication.
  5. Commerce determines the standard of living in a nation. This is because the extent of commercial activities is crucial to wealth of a nation.
  6. Commerce makes for the protection against risk in day to day business operations.
  7. Through commerce, there is a steady supply of goods in a nation. This is because commerce ensures that goods produced are stored until needed.

Please read on the functions and characteristics of commerce here

A public company is not owned by an individual; rather it's usually owned by groups or a large number of people.

The shares of a public company are traded freely on the stock exchange.

Below are some features of a public company:

  1. A public company must receive it’s training certificate to commence business.
  2. The minimum membership is two while the maximum membership is limitless.
  3. A public company has a legal status. It can sue and be sued.
  4. A public company files and publishes its annual reports, including its accounts.
  5. The liability of its members is limited.
  6. The shares are easily transferrable through the stock market.
  7. A public company can issue debentures to be secured as its assets.

Please read on limited liability company, its advantages and disadvantages here

There are seven elements of the marketing mix. These are:

  1. Product: Anything thing that satisfies a consumer’s need is referred to as a product. Product may come in the form of manufactured goods, raw materials or services.
  2. Price: Price is defined as the exchange value of goods and services supplied. In simple terms, it serves as a mechanism of exchange.
  3. Promotion: It involves all the processes that concerns with how business organizations should inform their customers about its product. If done properly, the demand of product will be increased. Promotions can take the form of advertising, search engine optimization, social media marketing, trade fairs exhibition and so on.
  4. Place: The place as a marketing mix concerns variables such as location and transport facility where the distribution of goods and services take place.
  5. Packaging
  6. Positioning
  7. People

Think of marketing mix as the set of marketing tools that an industry or company uses to drive or accomplish its marketing objectives in the target market

Please read on the principles of marketing mix here