pricing is a highly visible component of a firm's marketing mix and an easy tool for obtaining a differential advantage over competitors. however, when competitors continually undercut each other to gain that advantage, it can lead to a price war that damages all companies involved. when firms have identical or very similar products and price information is readily available - for example, coca-cola and pepsi - a common pricing approach to avoid price wars is:

The marketing mix's Promotion element is the one that is most readily noticeable. Advertising, sales promotions, and PR initiatives all fall under the category of promotion, which is the most obvious "P."

Why is the pricing component of the marketing mix the most crucial?

Customers are more likely to click on an advertisement or purchase one of your products when your product is priced lower than those of your rivals. Higher click-through and conversion rates are attained by employing a competitive pricing strategy.
The marketing mix's Promotion element is the one that is most readily noticeable. Advertising, sales promotions, and PR initiatives all fall under the category of promotion, which is the most obvious "P."
The only factor in the marketing mix that generates income is pricing; the other three are cost centers, which increase a company's expenses. The business model is closely related to pricing. An abstract depiction of the company's income streams is provided by the business model.

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