Importance of Price:

• Pricing keeps the economy in balance
• Price serves as a regulator of economic activity.
• The rise in any of the factors of production e.g. land, labour and capital is dependant upon the price received by each
• A products price has a strong effect on sales and an increase or decrease may mean different sales levels depending on the nature of the product

Price in many cases has a psychological impact on consumers. Sometimes it can be used to emphasize quality, other times a bargain or gain hence a saving. Price can also play a big role in offsetting competition.  Of all the 4P's only price can be changed quickly to respond to changes in the market. So whether or not pricing is properly done does determine the success of the firm. The marketing executive must have a thorough understanding of pricing decisions.