Pricing Objectives

| August 20, 2015

Types of Pricing Objectives
Profit objective
A majority of the enterprises make a lot of efforts to increase their profits. Profit ought to be increased on the whole output as opposed to single items, which minimizes customers’ dissatisfaction. When adopting this objective, marketers should strive to project the market image using sales promotion techniques. The consumers’ reactions should be watched closely. There should be less use of price hikes (Monroe, 1990).
Competitive effect objective
Often, pricing is done so as to prevent or meet competition. In case a firm is considered as a price leader, this pricing objective should be followed so as to ward off chances of competition (Monroe, 1990).
Market share objective
A company may be intending to maintain the current market share or escalate its share based on its stature. Big business houses are more likely to adopt this pricing as it promotes retaining of the market share. After raising the market share, attention is drawn from the government and if shed, revenues are lost. On the other hand, small businesses purpose to raise their market share so as to enjoy the large-scale production benefit. A company may sell products at a lesser cost for market capture (Monroe, 1990). New firms should adopt this objective keenly.
Customer satisfaction objective
This pricing objective is aimed at ensuring that the services and products being offered by a company are satisfactory to all the customers. Therefore, the company engages in activities such as geographic targeting so as to use strategies that can maximize the value to customers. If customers are satisfied, the results would be higher productivity in the company and retention. This objective can be met effectively if feedback is sought from the customers.
Reference
Monroe, K. B. (1990). Pricing: Making profitable decisions. New York: McGraw-Hill Pub. Co.

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