then its marketing-mix strategy, including price, will be fairly straightforward. For example, if Levi’s decides to target the “business look” with its Dockers pants or even more dressed-up with its Slates pants, this will suggest charging a higher price then with the mighty 501 jeans, which focus more an the casual look of teenagers, in the other hand requires charging a lower price. Thus, pricing strategy is largely determined by past decisions on market positioning. Price is only one of the marketing-mix tools that a company uses to achieve its marketing objectives. Price decisions must be coordinated with product design, distribution and promotion decisions to form a consistent and effective marketing program. Decisions made for other marketing-mix variables may affect pricing decisions. For example Levi’s who uses many resellers who are expected to support and promote their products have to build larger reseller margins into their prices. Thus, distribution as much as promotion affects the price of the product (the expensive advertising that the company will have to face will immediately change the price). For example Levi’s spends huge dollars amount when marketing the 501s jeans even if it is the cheapest pant Levi’s has but the important amount spent on television ads or bus ads will be compensated with a high level of sales.Thus, the marketer must consider the total marketing-mix when setting prices. If the product is positioned on nonprice factors, then decisions about quality, promotion and distribution will strongly affect price. If price is a crucial positioning factor, then price will strongly affect decisions made about the other marketing-mix elements. In most cases the company will consider all the marketing-mix decisions together when developing the marketing program.Costs are the elements that set the price that the company can charge for its product. Of course the company wants ...
