ABSTRACT
We always discuss pricing as one element in the marketing mix, but this is misleading; it is perfectly possible to use pricing in this way, and if you are considering your marketing mix from a strategic point of view you will naturally consider how your pricing strategy contributes to this, but because of the special nature of pricing for all businesses it can be regarded as unique within the mix. If the pricing strategy is not considered within the overall fi nancial strategy of the business there is a possibility that the business will not meet its costs and may not make a profi t. When setting prices, the fundamental requirement is to cover costs and then achieve some level of profi t which will enable the business to continue and, if possible, proceed to growth. If this is not done, the business will not be viable and however clever the marketing mix might look, it will fail. One of the diffi culties for authors of textbooks on tourism marketing is this very primacy of pricing for the business: focusing on marketing collaboratively, for instance, neglects the realities of market price sensitivities (Fyall and Garrod 2005) or suggesting that there are three or four basic approaches to pricing (premium, value for money, ‘cheap’ pricing, for instance) when the industry crosses many sectors where these concepts are not helpful (Holloway 2004; Cooper 2008) is crude and limiting.
