Pricing policies of an organization long term or short term

Question

Are the pricing policies of an organization long term or short term based? Briefly explain.

Answer 1

Depending on the volume of gains which a company has targeted, its pricing strategy might be short or long term based. When a company has invested a lot on research and development of the product and its endorsement, short term pricing strategy might be obeyed initially in order to recuperate the cost of investment quickly, after that it might change its pricing strategy to the long term one to maintain its business operations. For illustration a product might be sold at premium price at first and slowly its price might be lowered once it has captured adequate market demand.