Pricing
The pricing policies established by the new venture are an integral part of the marketing mix and strategy development. Price is a major, and integrated, component in the perceived value of a product or service, a worth that includes elements of the mix as revealed in the ex-pression
Value = f (Cost and Expectations)
where
Cost = risk, search and access, cash and ownership liability
Expectations = product satisfaction, quality, image (brand), seller acceptance or reputation.
The utility of having the product at a place and time is important, but in the context of being of value, it is more a qualifying dimension, even as it is an expectation. Promotional efforts enhance value through image building brought about by brand identification, while
product quality, packaging and other attributes enhance the value. Thus, even before the entrepreneur places a price on a product (cost to the buyer) there are mix ingredients that can be applied to enhance the perceived value. This being the case, the price becomes almost a secondary consideration.