Lably
Skip to content

Pricing objectives

  • 1 min read
  • 1 chapter

Learn it on Lably

Common pricing objectives

Some of the more common pricing objectives are:

  • maximize long-run profit
  • maximize short-run profit
  • increase sales volume (quantity)
  • increase monetary sales
  • increase market share
  • obtain a target rate of return on investment (ROI)
  • obtain a target rate of return on sales
  • stabilize market or stabilize market price: an objective to stabilize price means that the marketing manager attempts to keep prices stable in the marketplace and to compete on non-price considerations. Stabilization of margin is basically a cost-plus approach in which the manager attempts to maintain the same margin regardless of changes in cost.
  • company growth
  • maintain price leadership
  • desensitize customers to price
  • discourage new entrants into the industry
  • match competitors prices
  • encourage the exit of marginal firms from the industry
  • survival
  • avoid government investigation or intervention
  • obtain or maintain the loyalty and enthusiasm of distributors and other sales personnel
  • enhance the image of the firm, brand, or product
  • be perceived as “fair” by customers and potential customers
  • create interest and excitement about a product
  • discourage competitors from cutting prices
  • use price to make the product “visible"
  • help prepare for the sale of the business (harvesting)
  • social, ethical, or ideological objectives

More in Commercial Studies

Consumer protectionProtection of consumers against unfair practicesOwnershipLegal conceptResource depletionDepletion of natural organic and inorganic resourcesConsumer organizationType of advocacy groupsDebits and creditsSides of an account in double-entry bookkeepingLedgerBook registering economic transactions