5.2 Marketing Strategy

	Marketing role derives its main benefits from pricing.
	Pricing major marketing mix used to achieve the objectives of marketing.
	The decision of price affects other marketing mix and vice-versa.
	Therefore price decision must be in line with product design, distributions and promotions.
	This will ensure a consistency and that will enable marketers to handle their functions smoothly.

Per Unit Cost

	Per unit cost is the amount a company spent to produce a product.
	The objective of production is to cover cost and gain some extra benefit which is profit.
	Cost therefore serves as a benchmark of which a company can add margins to cover costs of production and get return from an investment.
	Cost or total cost can be broadly divided into fixed and variable cost.
	Fixed cost is the cost that does not change with the change in production level.
	Rental payment for using land or machines is an example of this cost.
	Variable cost on the other hand is that cost which varies with quantity produced.

5.2 Marketing Strategy

	Therefore, at the beginning of production it is not possible to always cover the total cost.
	Perhaps what one may start covering is variable cost, and the average cost will continue to fall as more produced good will share the fixed cost and the variable cost.
	With the passage of time, the unit cost or what is called learning curve will fall. This is shown graphically below.

Figure 5.1: Learning curve.

5.2 Marketing Strategy

	On the y-axis is the per unit cost and on the x-axis is accumulated production.
	The per unit cost tend to decline as more outcome is produced overtime, because of the experience in production, an efficient way is found to replace inefficient technique.