Price is the second P of marketing mix. It need not be discussed why price is important for the customers; but for the sellers, setting the right price is not only important but also quite challenging. The pricing of a product requires lot of considerations. It has to be high enough so that the customers do not doubt its quality, and low enough so as to remain within the reach of the target market buyers. There are numerous factors on which the prices depend.

We all have an idea that costs play a critical role in formulating the price strategy. Effective pricing decisions first consider the markets they want to serve, the price that those buyers can be convinced to pay, the quantity they will be able to sell at that price and the consequent relevant costs they must incur at that level of sales

Many changes such as costs due to external reasons like increase in the price of raw material etc directly affect the price of the produced item. This does not mean that the customer pays for it. It is not that all the increased cost is passed on to the customer. Rather, it affects the quantities the firm can profitably supply and the buyers it can profitably serve. Companies that price profitably make decisions on markets and quantities that they intend to serve based on the changes in costs.

Price and cost are closely related. Knowing cost does not mean simply computing the accounts data. The necessary understanding does beyond. Knowledge of how the changes in cost will affect the changes in price is very important. Relevant costs need to be identified. These are the costs that will directly affect the price. Sales can be improved in both the ways. One is by selling less of the product at higher price. Other is selling more of the product at lower price. There will be some costs that will remain constant over long periods of time. These costs are not considered while making a pricing decision.

A successful pricing strategy requires a smart study of the market. Sometimes, customers are willing to pay higher prices for the product. At these times, maximum profit can be gained for the company. At other times, profit may not be at a higher priority than beating competition or building a reputation. New pricing strategies are developed and user by managers every day. The goal is to keep the business profitable and keep the customers happy at the same time.

In today’s world, internet has become a quintessential thing in almost everybody's life, from almost all age groups. It has become the one stop shop for everything present in the modern life style, from casual searching for information about companies, products and services to education and research, communication, commerce and what not. As more and more people get online and do email, chat, linking, tagging, digging and discussing things, the internet turns out to be a massive framework that can be used to bring together a new economic engine that can serve both the rising businesses as well as the well established players in today’s market with a highly cost effective way to advertise their products. This new way of advertising has the potential to churn out huge profits to the people who use it and can be beneficial for their customers as well. And it’s not a fad, Internet or online advertising is being heavily utilized by companies today and the results they are getting are indeed impressive.

Internet Advertising has come to life due the birth of the global online community and of course, because of the technologies that have made possible enabling richer user experience scenarios in web based applications. This global online community has created a customer base for everybody doing business that has no leaps and bounds in terms of presence. And due to technology advancement, it’s getting cheaper day by day to have an online presence.

Online Advertising brings together the technical and creative aspect of the web and requires a comprehensive strategy that put companies’ business model and sales related goals in line with its website's functional and aesthetical design while focusing on its target markets. It doesn't simply means building or promoting a website or put banner ads on various sites through exchange or affiliate programs. It requires a lot of careful planning, thought giving and brainstorming on the strategic part to make it successful.

There are many means available today that can be used to advertise your products into the target market using Internet. These include:

Banner and Link Exchange Programs

Search Engine Marketing

Search Engine Optimization

E-Mail Marketing

Affiliate Programs

Just like that, there are many business models which are associated with Internet based advertising including but not limited to:

E-Commerce, where goods are sold directly to customers

Publishing, which includes sale of advertising and

Lead based websites, where the organization generates revenues by getting sales leads from its website.

Online advertising has many advantages over the traditional methods of advertising like print media and television. First, it’s a highly focused way of advertising and caters to the specific need of an individual user. Ads can be placed at locations on the web that are known to be specifically liked to serving only certain types of content thereby making sure that the ad reaches its target audience easily. Internet based advertising is usually cheaper than the traditional methods since payouts are generally made on the basis of number of impression or clicks. Also, statistical data about the success or failure of an ad campaign can be easily got due to the very nature of Internet Advertising.

The only two downfalls of Internet advertising are internet availability along with slow internet speeds which can bring down the user experience to unacceptable levels sometimes, and the inability of the customer to actually sense the real product by touching, smelling etc before they buy it. The former is slowly getting out of the way as internet connections are going faster and faster along with increased penetration day by day, But the latter is considered to be a greater obstacle in the success path of online advertising, especially in some markets like Asia Pacific.

So coming to conclusion, it is safe to say that Internet advertising is certainly gaining acceptance by the businesses as well as customers and in future progression, it is believed to become a highly potent source of revenue generation once some initial issues are ironed out.