Pricing Objectives and Policies

Pricing Objectives and Policies - ProfitOriented Objectives...

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Profit-Oriented Objectives Target return Objective:  sets a specific level of profit as an objective.  This compares the ROI for a product with others Profit Maximization Objective:  seeks to get as much profit as possible. Target Return Profit Maximization Sales Oriented Objective:  seeks some level of unit sales, dollar sales, or share of  market – without referring to profit.  Sales growth rather than profits Growth in Market Share:  this may lead to better economies of scale than competitors.  It is also easier to measure a firm’s market share than to determine if profits are being  maximized.   Status-Quo Objectives:  Managers satisfied with their current market share and profit  adopt this objective: Don’t change prices Stabilize prices, meet competition, or avoid competition Nonprice Competition:  aggressive action on one or more of the Ps other than Price. Price Flexibility Policies One-Price Policy:  means offering the same price to all customers who purchase  products under essentially the same conditions and in the same quantities Make pricing easier Flexible- Price Policy:  means offering the same product and quantities to different  customers at different prices.  Pricing databases make flexible pricing easier Salespeople can adjust prices to the situation, these situations involve personal selling,  not mass selling.  Information associated with flexible pricing must be kept from the mass market. 
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This note was uploaded on 02/23/2012 for the course BUSI 406 taught by Professor Perreault during the Fall '11 term at UNC.

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Pricing Objectives and Policies - ProfitOriented Objectives...

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