10.3.5 Role of pricing in managerial decision-making
We can now see that pricing is best considered as one of many interdependent decisions that firms have to make, and often is not the most fundamental. Firms need to start from their objectives in general terms, and then consider their competitive advantage in terms of their resources and capabilities, in conjunction with the external conditions of the market in terms of customers and competitors. Normally (with exceptions examined later in this chapter) this means starting with a positioning decision, leading to a product decision, and then considering the other elements of the marketing mix. Pricing is considered in this context, and affects the buying decisions of consumers through determining the amount of consumer surplus created.