marketing core conflict cloudmarketing core conflict cloud - - One of marketing's core problems is the dilemma of how to make the decision of pricing products for the market. Marketing has to set the price so that enough product volume is sold and at the same time a reasonable profit margin is made on the product. In order to set the price so that sales volume will be high enough, marketing must ensure that the price reflects the consumers' perception of the product's value to the consumer. In order to have reasonable profit margins marketing must set the price based on the supplier's perception of value, which is based on the cost of providing the product or service to the client. The pricing conflict revolves what to use as the basis of setting the price of the product or service. See the evaporating cloud below.
One TOC solution is based upon the recognition that requirement C is incorrect and should be restated to: C The company covers the company's operating expense and investment. Marketing sets the base or minimum price as the truly variable cost and recognizes that market segmentation is required. In segmentation, a market segment is defined as a portion of the market where the price and quantity offered has no impact on the price and quantity offered in other markets. A market segment might be defined as the federal or state government. Marketing then can segment the market charging different prices based on the client's perception of value while ensuring that the base price is always exceeded.
See:core conflict cloud.