Notes on pricing decisions

Current revenue maximization - seeks to maximize current revenue with no regard to profit margins. Another type of competitive pricing objective is a pricing plan that is intended to have a certain effect on the marketing efforts of the competition.

Most products fall in between the spectrum of "standardisation" to "adaptation" extremes. Profit is one of the major objectives in pricing.

In such cases, the demand curve slopes upward. You are not currently authenticated. Firms are not expected to exploit consumers by unnecessarily charging high prices.

If the price is decreased, there will be an increase in total revenues. Many product decisions lie between these two extremes.

Physical product The physical product is made up of a variety of elements. Thus, sellers in these markets do not spend much time on marketing strategy and have little or no control over pricing.

This opens up a wealth of new marketing opportunities for producers. External factors, such as governmental regulations, cannot be influenced by the company.

Factors Affecting Pricing

Maize, for example, would never sell in Europe rolled and milled as in Africa. A family brand of products under the Zeneca ex ICI label or Sterling Health are likely to be recognised worldwide, and hence enhance the "subjective" product characteristics.

It is only eaten whole, on or off the cob. Another volume-related pricing objective is the market-share objective. It considers the data-accounting or other-that are examined and analyzed by these executives.

The firm tries to determine the price at which it will break even or make the target profit it is seeking. The major product is priced at a relatively high figure.

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Pricing Methods To set the specific price level that achieves their pricing objectives, managers may make use of several pricing methods. This discounted pricing draws attention to the product and can be used as a hook to bring in customers who will potentially purchase other items.

The present study is primarily concerned with individual cases.

Pricing Strategies

World brands in agriculture are legion. It protects the product from damage which Notes on pricing decisions be incurred in handling and transportation and also has a promotional aspect. For aircraft cargo the package needs to be light but strong, for sea cargo containers are often the best form.

Pricing Objectives of Not-for-Profit Organizations: Inelastic demand indicates that price increases might be feasible. Demand is expected to be relatively inelastic; that is, the customers are not highly price sensitive.

Does using standard markups to set prices make sense? The consequences are damage in the blowroom and carding and danger of fire. So, for example, selling mineral water may not be enough. Penetration pricing pursues the objective of quantity maximization by means of a low price.

Since the size of the profit margin can be varied, a decision based on a price in excess of full cost should ensure that a company working at normal capacity will cover all of its fixed costs and make a profit. Wherever possible, it attempts to trace the sequence of events that has led to a particular outcome, from the initial awareness of a problem through consideration of competing alternatives to the final decision.

Packaging specifications, weight of produce per packaging unit, type of packaging? In a purely competitive market, marketing research, product development, pricing, advertising, and sales promotion play little or no role.

In these classes, participants get to work on exercises that relate to issues currently facing the company. For enquiries regarding reprint permissions or the licensing of ICMR case studies for use in the classroom, please contact casehelpdesk ibshyderabad.

It makes use, instead, of the case approach such as is used by Kaplan, Dirlam, and Lanzillotti in their volume and by a few other writers, though it has tried to achieve greater depth and flexibility in the interpretation of company statements on pricing than some case studies have demonstrated.

In export the quality standards are set by the importer. The development costs may be high, but the advantages are also very high. As such, the pricing policy should be reevaluated over time. An organization adopts various pricing objectives, but to get success, objectives of the company must go parallel with these strategies.Tax Notes is the first source of essential daily news, analysis, and commentary for tax professionals whose success depends on being trusted for their expertise.

Chapter 6 Class Notes Contents of Chapter 6 Class Notes. What is Consumer Buying Behavior? Stages of Consumer Buying Behavior? (For complex decisions). Actual purchasing is only one stage of the process. Not all decision processes lead to a purchase.

This paper offers a simple approach to the theory of decentralizing inventory and pricing decisions within a distribution system. We consider an upstream manufacturer selling to two outlets, which compete as differentiated duopolists and face uncertain demand.

Vertical Control of Inventory and Pricing Decisions

Using the Anticipation of Competitive Actions to Make SMART Pricing Decisions. By: Scott Davis, Principal, Strategic Marketing Decisions John Cripps, Vice President Data-Driven Marketing, Fireman's Fund Insurance Company.

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Unit 9: Pricing. Price is the assignment of value, or the amount the consumer must exchange to receive the offering. Pricing strategy is one of the most difficult areas of marketing decision making.

It deals with the methods of setting profitable and justifiable prices.

Notes on pricing decisions
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