Sunday, April 19, 2009

Chapter 17: 2.1

Examples of pricing objectives:

1. Profit-oriented pricing can occur when a company retains accurate data on what prices the market can sustain, customer satisfaction, and efficiency. An example of this would be pricing that seeks to gain a return on investment based on a specific asset of the company, cf. a company that spends money to educate an employee whose new degree/increased reputation then brings new clients/money to the firm.

2. Sales-oriented pricing seeks to maximize sales. This can be done with a post-holiday sale to rid the company of merchandise with lesser regard for profit margin per item.

3. Status quo pricing matches competitors' prices. This could happen when a company offers to match any other company's price on a similar item.

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