Identify the component of marketing mix which is the single most important factor affecting the revenue and profits of a firm.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Price
Option (1) Product — Incorrect. The product decisions are about features, quality, packaging and so on. They are not called the single most important factor for revenue and profits.
Option (2) Price — Correct. Price is the single most important factor affecting the revenue and profits of a firm. So firms give high importance to fixing the price.
Option (3) Place — Incorrect. Place is about distribution and physical movement of goods. It is not described as the single most important factor.
Option (4) Promotion — Incorrect. Promotion is about making customers aware of the product and persuading them to buy. It is not described as the single most important factor.
NCERT (2026-27 Edition): “Pricing is considered to be an effective competitive weapon. In the conditions of perfect competition, most of the firms compete with each other on the basis of this factor. It is also the single most important factor affecting the revenue and profits of a firm. Thus, most marketing firms give high importance to the fixation of price for their products and services.” |