《BUSINESS STRATEGY AND PRICING》.pdfVIP

RELEVANT TO ACCA QUALIFICATION PAPER P3 Studying Paper P3? Performance objectives 7, 8 and 9 are relevant to this exam BUSINESS STRATEGY AND PRICING The revised Paper P3 Study Guide now includes an additional learning objective, E3e: ‘Describe a process for establishing a pricing strategy that recognises both economic and non-economic factors’. This is an extension to the learning objective E3d which refers to the effect of e-marketing on the traditional marketing mix of product, promotion, price, place, people, processes and physical evidence. It is, of course, appropriate for accountants to specialise in the determination of price as this can relate closely to other accounting measures such as costs, revenues and profits. Additionally, altering the price of a product will usually allow much faster changes to organisational performance than developing products or designing and running promotional campaigns. This article looks first at the influences on prices and then at specific approaches. The influences on prices The influences on prices can be summarised by the following diagram: • Mission and marketing objectives • Pricing objectives Costs Competition Customers Controls • Marginal • Type of market • Consumers • Statute • Total absorption • Price competition • Intermediaries • Regulation • Opportunity • Non-price competition • Perceived value of the goods • Contract • Other marketing mix • Nature of the goods variables Although there might appear to be a natural or normal order in which to deal with these influences, if must be emphasised that, as in all of strategic planning, the process is l