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How To

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Price can be defined as value measured by what must be given, done or undergone to obtain certain products or services. It is the market worth of a product or service available for sale per time.

Price Determination
Organizations take factors such as the cost of production, market structure, nature of demanddistribution and transportation cost, to fix or determine the market price of a product or service.

Price Goals and Objectives
In determining price for a product, a company has to first decide on the goals and objectives she wants to achieve with the pricing. Some of these goals and objectives are as follows:

1. Profiting goal:
(a) To achieve a target return on investment
(b) To maximize profit

2. Sales goal: here, the company may want to:
(a) Increase sales
(b) Maintain or increase market share

3. Status quo goal: here the firm may want to:
(a) Stabilize its price
(b) Meet competition


Methods of Determining Price:

(1) Cost plus mark up

(2) Market penetration pricing

(3) Diversion pricing 

(4) Dumping pricing

(5) Skimming pricing

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