Define price and discuss the role of price in the evaluation of product alternatives.

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The Answer is Answers will vary.Price means one thing to the consumer and something else to the seller.To the consumer,it is the cost of something.To the seller,price is revenue-the primary source of profits.In the broadest sense,price allocates resources in a free-market economy.It is also what is given up in an exchange to acquire a good or service.Marketing managers are frequently challenged by the task of price setting,but they know that meeting the challenge of setting the right price can have a significant impact on the firm's bottom line.Organizations that successfully manage prices do so by creating a pricing infrastructure within the company.This means defining pricing goals,searching for ways to create greater customer value,assigning authority and responsibility for pricing decisions,and creating tools and systems to continually improve pricing decisions.The importance of creating the right pricing strategy cannot be overstated.Price plays two roles in the evaluation of product alternatives: as a measure of sacrifice and as an information cue.To some degree,these are two opposing effects.From the perspective of the sacrifice effect of price,the sacrifice is usually money in the United States,but it can be other things,tool.The price may be time lost while waiting to acquire the good or service,or the lost dignity for individuals who lose their jobs and must rely on charity.The information effect of price is illustrated when consumers do not always choose the lowest-priced product in a category (such as shoes,cars,or wine),even when the products are otherwise similar.One explanation of this behavior,based upon research,is that we infer quality information from price.That is,higher quality equals higher price.The information effect of price may also extend to favorable price perceptions by others because higher prices can convey the prominence and status of the purchaser to other people.

Define Price and Discuss the Role of Price in the Evaluation