Price
The price or pricing of a product is perhaps one of the most critical parts of the paradigm
of the marketing mix, as it is the one thing the average consumer is going to focus on. Pricing is
one variable that can fluctuate from time to time based on the organization’s marketing strategy
and the environment in which the product is being sold. According to Koku (2020), regardless of
the organization’s size, pricing is one of the most critical activities within the firm. Therefore, it
becomes imperative for organizational leadership and business owners to understand the
importance of getting this aspect of the marketing mix right. Sigh (2020) describes that the price
is the amount a customer will pay for a product, and is ascertained by various factors, including
the cost of raw materials, product differentiation, competition, and the customer’s perceived
value of the product.
Pricing Strategy
Every profitable organization intends to establish a business that is profitable to validate
and show that the selected strategy is working. Koku (2020) describes the importance of the
pricing process for the organization is that pricing is the only means through which the
organization can generate revenue. Without taking the correct approach to pricing considerations
as a business solution, organizations put themselves at risk of failing to stay open long-term, it is
vital to make sure choosing the pricing strategy is done correctly. Mistakes in the pricing strategy
can result in the organization being less profitable and have long-term negative impacts as the
organization will not see the expected or needed profits (Koku, 2020). The organization must
find ways in which to complement a strategy that suits the organization and the product being
offered, where the product or service is sold in a way that will be profitable for the organization
and meet the organization’s strategy. The majority of organizations utilize a pricing strategy in
order to cover the associated costs of producing and selling their products. The critical factor in
pricing is deciding the cost of the product strategy for marketing and the expenses related to the
distribution of the production, advertising expenses, and coping with price variation in the
market (Singh, 2020). Selecting the right pricing strategy means that the organization, and
everyone involved must understand what it means for the organization to maintain a profit.
Effects of Price Cap Regulation
One of the most common price cap regulations would be the regulation related to the
costs of pharmaceuticals. The pricing of pharmaceutical products is a vital and contentious issue
for both developed and developing countries. Many governments frequently consider regulatory
mechanisms such as price cap regulations and reference pricing to prevent pharmaceutical firms
from charging excessive prices for drugs and protect the countries citizens from overpaying
(Chen et al., 2019). To counter the cap in pricing, organizations must find ways to cope and still
be profitable, organizations often respond to these regulations through strategic policies and
operational changes in order to still remain profitable (Chen et al., 2019). There is a cause and
effect when one part of the equation is disrupted and in the case of price cap regulation, the result
can be a shortage in supplies that will impact the consumer. While it is a fair statement to make
that price cap regulation is one of the commonly used regulation policies to reduce drug prices
and protect the consumer, price cap regulations may also cause risks to the pharmaceutical
supply chain because of negative impacts to the organizations that are developing and
manufacturing the drugs that the consumers need (Chen et al., 2019). It is imperative for
organizations to ensure that their strategies and policies are implemented in a way that will
impact pricing positively, and within the pharmaceutical industry they must implement policies
that keep prices low but still allow for profits and to not impact the consumer or the supply
chain.
Biblical Integration
Leviticus 25:16 “If the years are many, you shall increase the price, and if the years are
few you shall reduce the price, for it is the number of the crops that he is selling to you” (English
Standard Version, 2001). Just as Leviticus discusses, pricing strategies have been around for
many years and The Lord directed in those times how pricing should be managed. The
organization should be strategic with their pricing and meeting the consumer’s needs and wants,
but still ensuring the organization is profitable for Proverbs 20:14 discusses that even the though
the buyer might complaint of the price in the end they still will boasts of what they purchased;
“’Bad, bad,’ says the buyer, but when he goes away, then he boasts” (English Standard Version,
2001). When determining pricing strategies, it is not just crucial for the organization to ensure
that they are making a profit on the service or product they are offering and to meet the needs of
the consumer, they must also ensure they are acting in a Godly manner, for all organizational
leaders must remember the price that was paid for them and their salvation “for you were bought
with a price. So glorify God in your body” (1 Corinthians 6:20, English Standard Version, 2001).
Conclusion
It is well established that price is one of the most important aspects of the 4Ps Marking
Mix. The price element is what will make an organization successful or a failure. Ensuring that
the organization is setting strategies that benefit the organization and the consumer will
determine the longevity of the organization and the relationship that they build with their
customers.
References
English Standard Version Bible. (2001). ESV Online. https://esv.literalword.com/
Koku, P. S. (2020). Choosing the right pricing strategy. In Entrepreneurship Marketing (pp. 131-
146). Routledge.
Singh, M. (2020). Marketing mix of 4P's for competitive advantage. IOSR Journal of Business
and Management, 3(6), 40-45
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