APT Initiatives
APT Business & Economics Resources
Minimising Workloads, Maximising Performance
Established in 1999

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One of the four ‘P’s of the marketing mix. This element concerns the price required to make an acceptable level of profit, which customers are willing to pay, (taking into account elasticity, costs, and competitors). The price is the value of each unit of the product or service in the market place. It is the money the customer has to pay in order to buy the product or service, and it is the money the seller receives (the revenue) for selling the product or service. Price has a direct influence on a customer’s purchasing decision and on the overall demand for a business’s product / service and profitability of a business. If price is set too high, profit margins may be high but sales and, thus, profits may never be realised as customers can either not afford to, or may not be willing to buy at that price, as they do not perceive that they are getting value for money. If price is set too low in relation to costs and / or what customers would be willing and able to pay, then the business may fail to realise the business’s potential in terms of sales revenues and profits and, in the worst-case scenario, fail to make a profit.

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