Objectives Of Pricing Objectives

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Pricing Objectives

Without a proper pricing strategy, no business can expect to survive in the competitive market of today. And what leads to that strategy? Well! That's no other than the accurate identification of pricing objectives. Identifying the purposes of setting up the pricing is the first step towards a robust pricing strategy
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Although survival is not the only goal, the businesspeople have in their minds about their businesses, but also to prosper by generating a lot of income from it. Therefore, pricing objectives may vary significantly from business to business depending upon the current situations that the brand is facing, the mindset of the management team, rise, and downfall in supply and demand, etc. Pricing up the product …show more content…

As its name suggests, ROI is the amount of return (either as a fixed percentage of sales or profit)generated by a particular degree of investment.
A high return due to high pricing of the product with the low cost of production and promotion is what all the investors strive for. But again, they also need to care for their customer base.

3. Increasing the sales
In these sales-oriented pricing objectives, knowledge gained from experience curve is put to some good use in predicting a strategy that's capable of decreasing long-term costs while ensuring a long-run profit, by increasing the number of units sold. For this purpose, companies may alter the prices or even whole pricing policies to improve their chances of getting a greater number of sales.
Furthermore, brands can use the objective for the purpose of increasing the market shares also, which is a measure of the sales comparison with another brand's or in the whole industry. Aside from achieving a definite target of market share, companies can also use pricing to boost up their shares. Since, greater the price (to an appropriate level), greater are the chances to a larger proportion.

4. When survival is the only …show more content…

But that's why we do planning, hoping for the best and getting ready for the worst. In times of overcapacity or market decline, strategists can decrease prices to an extent which could still cover up the costs and let the business up and running. That's the case where survival gets higher priority as compared to profits and sales.

5. Making your product a trendsetter
Quality is what determines how much a product should cost. When a product is new in the market, people are very much interested in it. But when it gets a thorough mixture of high quality and affordable price, it is referred as to be the trendsetter in the market.
The primary goal of the companies, setting such pricing objectives, is making a product visible in the market by price, especially if it's a new one. Companies set their prices low so as to attract people, and if guys like it, it works as a trigger to a repetitive chain reaction of purchases that people

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