UNIVERSITY OF BRADFORD
MANAGEMENT DEVELOPMENT INSTITUTE OF SINGAPORE
PRINCIPLES OF MARKETING & PRODUCTION MANAGEMENT
When setting price for their products, the company consider its external environment. Describe four parts of the external environment and how they affect businesses.
Price refers to amount of money or goods, asked for or given in exchange for products or services that exchange for the benefits of having or using the products or services. It is one of the elements in the Four P’s found in marketing mix. The other three aspects are product, promotion and place.
Price setting of a product refers to a new launch product by the company setting a reasonable price according to the marketing survey. There are four parts of the external environment that are taken into consideration.
Types of markets
All businesses are competing in a market. Products that are sold in a market will determine the type of competition producers engage in. Markets are defined by the way in which producers compete for customers of their products. Markets are structured in four different ways.
1.) Pure Competition
In pure competition, anyone is able to product a products for sale to any of the consumer who wishes to buy. Pure competition occurs when producers and many consumers create a market price, a price that is agreeable between both parties. This pure competition is based on the law of supply and demand: producers attempt to make the highest profit they can on their products, and consumers search the market for the lowest price on the products they want. This type of competition results in profits for producers and a variety of desirable products for consumers. No single producers or consumers can influence the price and thus, this market does not require much time constructing strategy.
2.) Monopolistic competition
In Monopolistic competition, it is created when some potent companies dominate manufacture a...