--%>
Assignment Help - homework help

Explain the objectives of pricing policy and its aim

Explain the objectives of pricing policy and its aim.

E

Expert

Verified

Pricing decisions are generally considered a part of the general strategy for getting a broadly defined purpose. Before finding out the price itself, the management must decide the objectives.

When setting the price, the firm may intend at one or more of the given objectives.

1. Profit maximization: as the primary motive of business is to earn maximum profit, pricing all the time aim at maximization of profit by maximization of sales.

2. Market share: For increasing market share a firm may lower its price within relation to the product of competitors.

3. Target return in investment: The firm must fix the price for the product in a way that this will satisfy expected returns for the investment.

4. Prevent or Meet competition: with the aim of discourage competition a firm may adopt a low price policy.

5. Price stabilization: The other objective of pricing is to stabilize the product prices over a given period of time.

6. Resource mobilization: In this company may fix their prices in a way that adequate resources are made accessible for the firm’s developmental, expansion investment and so forth.

7. Speed up cash collection: Several firms try to set a price that will enable rapid cash recovery as they may be financially tight or may regard future is more uncertain to justify patient cash recovery.

8. Growth and Survival: A significant objective of pricing is survival and getting the expected rate of growth. Profit is less significant than survival.

9. Prestige and goodwill: Pricing also intends at maintaining the prestige and improving the goodwill of the firm.

10. Getting product: quality leadership, Several Companies intend at establishing product quality leader by premium price.

   Related Questions in Managerial Economics

  • Q : Occupational Crowding in Wage

    Disadvantaged groups have historically been pressured toward low wage jobs in a procedure termed as: (1) occupational crowding. (2) labor staggering. (3) systemic discrimination. (4) reverse favoritism. (5) nepotism.

    Q : Demands of consumers adjusting to new

    CD sales have fallen from 2000, although sales of DVDs have increased, suggesting such that: (w) supply of prerecorded music should have fallen. (x) law of demand does not apply to the music market. (y) demands of many consumers adjusted to new technology. (z) music i

    		•
  • Q : Social Welfare and Efficiency on Labor

    Inefficiency may exist within a labor market while a firm only hires labor up to a certain point where: (w) the value of labor’s marginal product equals the wage rate. (x) VMP > MRC. (y) MPPL = w/P. (z) the last unit of labor adds as much to

    		•
  • Q : Most wage elastic at prevailing wages

    Demand is probable to be most wage elastic at prevailing wages for: (1) carpenters. (2) neurosurgeons. (3) computer programmers. (4) teenage employees of fast food restaurants. (5) economists. Can someone explain/h

    		•
  • Q : What are the levels of Demand

    What are the levels of Demand forecasting?

    		•
  • Q : Highest income of supply of labor This

    This worker’s weekly income in this demonstrated figure would be the highest at: (w) point a. (x) point b. (y) point c. (z) point d. How can I solve my Economics problem? Please suggest me the correct answer.

    		•
  • Q : Problem on Occupational Crowding After

    After vacationing hundreds of restaurants, then a restaurant critic has concluded which in almost all the workers who clear tables and also wash dishes appear to be illegal aliens by Mexico. The critic has observed a phenomenon termed as: (1) marginalized labor. (2) t

    		•
  • Q : Pay the lowest wages in market

    Occupations along with the highest percentage of women workers tend to: (1) pay the highest wages. (2) need relatively more human capital and experience. (3) pay the lowest wages. (4) require very small human capital or experience.

  • Q : Part of the payment in economic rent

    Economic rent shows part of the payment for the utilization of: (w) landowners’ labor and capital to keep their land. (x) landowners’ buildings and equipment. (y) resources for that supplies are less than perfectly elastic. (z) any piece o

    		•
  • Q : Determined equilibrium wage from the

    Within a purely competitive labor market, there the firm: (w) sets the wage that the household should accept. (x) should accept the wage demanded by the household. (y) and household arrive at the wage by bargaining. (z) and household should take the e

    		•