CHAPTER ONE

0.1      INTRODUCTION

1.1      BACKGROUND OF THE STUDY

            One of the most important operating decisions management must take is establishing the selling price for its product and services, moreover manufacturing companies are always faced with numerous decisions. The management has to decide on what to produce, how to produce at what quality and quantity to produce and at what price, the management also have to consider what policies and method to be adopted. Management must decide on the right price of the product, it is offering to the market and then set up policies and then set up policies on discount allowance, payment period, freight payment, credit terms and many other price related situation which ultimately affects the

 list price.

IMPACT OF PRICING IN MARKETING OF COCA-COLA

Marketing consist business related activities that see to anticipate demand, help in developing and making the goods and services available to the satisfaction of consumers and users and as a profit to the organization. When a product is produced by an organization, the consumer usually do not collect the product free of charge but for a price.

       This consideration depends on the perceived worth of the product. All profit and nonprofit organization face the task of selling price on their product and services. (Philip Kotler 1987).

         Through history, sellers and buyers in the process of negotiation set prices, it is than he is expected to receive, and the buyer will offer less than he is expected to acceptable price is reached.

        Pricing in marketing is the key activity within the capitalistic system of free market enterprises, in other words it is the most critical element of marketing mix that determines a company’s marketing shares and profitability. Price is the only marketing mix that yield revenue, while the other 3ps generate cost. Most companies do not only find it difficult but also mishandle their pricing strategies.

         Price is one of the major variables that a marketing manager controls. Originally price is considered vital among the factors which influence buyer’s choice and behavior. In 1950’s and 1960’s non-price factors grew relatively more important and it had reached a point where over half of a sample of company managers did not select pricing as one of the five most important policy areas in their firm and marketing success.

        Recently, because of the world wide inflation price has again attracted considerable attention and is now viewed by many marketers as one of the most important element in the marketing mix following the product.

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