Choosing the right price to charge is among the most complex of all marketing decisions. As we note in our Pricing Decisions tutorial, setting price is complicated because marketers must take into consideration both internal factors, which are those largely controlled by the marketer, and external factors, which are outside their control. For external factors, what their competitors charge is the most obvious one marketers will consider. This is especially crucial if the target market does not see much difference between competing products. In this type of market, constant monitoring of competitors’ marketing activity is needed, including watching what happens with their price.
In our What is Marketing? tutorial, we summarize what marketing is about with a single sentence consisting of just 28 words. However, a clearer picture of marketing can be found in our dissection of the key terms found in our definition. In particular, for this post we want to focus on just one word found in the definition - “create.” An essential characteristic of nearly all marketers is that they must be creative in all aspects of marketing. This is especially the case for product decisions. Marketers need to be constantly on the lookout for new ideas that can lead to goods and services that will be of interest to current customers or, better yet, to customers they do not currently serve.
Staying on top of consumer trends is a necessary task for all marketers. By watching what is happening among current and potentially future customers, marketers can gain insights that may affect their marketing decisions. However, while it is very easy to say this, actually having the time and, most importantly, the money to keep up can be a tough task. It is especially challenging for organizations that do not have a dedicated research staff, whose job includes collecting such research. Fortunately, while a marketing organization may not have the time to undertake their own research or the funds to support their own researchers, other options exist.