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MARKETING MANAGEMENT LECTURE-45(MODULE-4) PRICING OBJECTIVES FOR B.COM 5TH SEMESTER




Pricing Objectives Before determining the selling price of a product,the management should determine the pricing objectives The pricing objectives of a company must logically relate to the overall objectives of the company
The major pricing objectives are:
1. Return on investment
2. Market share
3. Profit Maximisation 4.Meeting or preventing competition
5. Price Stabilisation
6. Pricing for market skimming 7. Survival
1. Return on Investment Most well- established companies are following the pricing objectives of target return.Here the objective is to earn a certain rate of return on investment
2. Market Share
Some firms establish pricing objectives to maintain or increase market share.Market share means the percentage market for the product of a firm in the concerned product’s market
3. Profit Maximisation
The aim of every business is to make profit and maximise it’s profit.A company with this objective may fix an optimum price with a view to increase the volume of sales and thereby profit
4. Meeting or preventing competition
Many firms fix the price for their products so as to meet competition or prevent competition.No marketers can fixa price of his own without considering his competition
5. Price Stabilisation
The price once fixed should be stabilised.Price Stabilisation means bringing the price of the product at a narrow range and preventing frequent and violent fluctuations in price It also prevent price war against the competitors
6. Pricing for Market Skimming The goal of many manufacturers is profit Maximisation at the shortest time.Most of them initially fix a price to yield a high profit margin. With this objective ,the selling price is fixed in such a way so as to squeeze out the margin possible profit from each individual unit
7. Survival
The fundamental pricing objectives is a survival. Most organisation will tolerate short term losses and many other difficulties if they wish to survive in the market Price is used to increase sales volume at that level which matches the organisational expenses

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