Describe the important factors that a Marketing Manager would consider when deciding on the price of a new product or service. - Leaving Cert Business - Question 7(A) - 2005

In this method, all product costs are calculated, and a margin for profit is added to determine the final price. The marketing manager needs to ensure that the total cost is accurately computed to implement this pricing model effectively.

The price should be set in relation to competitors’ prices. Marketing managers will consider the pricing strategies of rival companies and may need to adjust their prices to remain competitive, especially if they offer similar products or services.

Understanding the demand for the product or service is crucial. A Marketing Manager should evaluate how much customers are willing to pay, which can influence pricing strategies significantly.

Different market segments may demand different pricing strategies based on varying characteristics such as income levels, buying behaviors, and preferences. Thus, tailored pricing might be necessary for different consumer groups.

The current economic environment will also impact pricing decisions. Factors such as inflation, unemployment rates, and consumer confidence can affect how much customers are willing to spend.

Marketing managers must consider any regulations governing pricing in their industry, such as price-fixing laws or regulations that protect consumers, which may influence pricing structures.

Understanding the stage of the product in its lifecycle (introduction, growth, maturity, decline) can influence pricing decisions, with different strategies applied at different stages.