The marketing function that determines how much gross profit a business will make on a good or service is pricing.

Quick Scoop: Core Answer

In marketing, pricing is the function that sets the selling price of a product or service.

That price directly determines revenue per unit; when you subtract the cost of goods sold (COGS) from that revenue, you get gross profit.

In simple terms:
Price per unit – cost per unit = gross profit per unit.

So, by choosing the price (high, low, discount, premium, etc.), the pricing function effectively decides how much gross profit the business will earn on each sale.

Why Pricing Drives Gross Profit

  • Pricing sets how much money comes in for each unit sold (revenue per unit).
  • Costs to produce the item (COGS) are relatively fixed in the short term.
  • Therefore, changing the price changes gross profit much more quickly than most other marketing activities.
  • Marketers balance demand and margin, looking for a price that maximizes total gross profit, not just sales volume.

A common classroom or quiz explanation:

“Pricing is the marketing function that determines the revenue a business will generate from a good or service. This revenue, minus the cost of goods sold, determines gross profit.”

Mini Story Example

Imagine a business that sells a gadget:

  • Cost to make each gadget (COGS): 20
  • Option A – Price it at 30
    • Gross profit per unit = 30 – 20 = 10
  • Option B – Price it at 40
    • Gross profit per unit = 40 – 20 = 20

Nothing else changed except the pricing decision, yet gross profit per unit doubled.

That is why pricing is the marketing function tied directly to how much gross profit the business makes on a good or service.

TL;DR:
The correct answer to “which function of marketing determines how much gross profit a business will make on a good or service?” is: Pricing.

Information gathered from public forums or data available on the internet and portrayed here.