Course Hero 31

Course Hero 31 - 5. What is the six-step procedure most...

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5. What is the six-step procedure most firms use to set their pricing policy? As an entrepreneur, setting a pricing strategy and policy for your products/services for the first time when you develop it or when you introduce your product / service into a new geographical area, can be a big head ache. Reason being, that price is not just a tag on the product or service, it communicates to your customers your business’s intended value positioning and also determines your profitability. When setting a pricing strategy you have to consider the following 6 factors; 1. Select the pricing objective to decide where you want to position your market offering. The five major objectives that you can pursue are survival, maximum current profit, maximum market share, maximum market skimming or product –quality leadership. Having a clearer objective makes it easier to set a price. 2. Determine the demand. The price you set will affect the demand level and impact your business objectives differently. In normal situations, price and demand are inversely related, in that
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Course Hero 31 - 5. What is the six-step procedure most...

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