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Pricing Strategy

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Price is a very important factor in the marketing mix. It affects sales volume, profits, the actions of competitors, and the image of the product/service or store. Proper pricing is a prerequisite of success.

Pricing has two basic functions:

(1) to enable a business to cover costs and make a profit, and (2) to motivate customers to purchase products or services. The marketing function with regard to pricing is to use a marketing mix so the product or service can command the best possible price. The business must be able to prosper and customers must perceive they have received value for their money.

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