SMG MK 323 Lecture Notes - Lecture 14: Carmax, Premium Pricing, Marketing
Document Summary
Each firm embraces objectives that seem to fit with where management thinks the firm needs to go to be successful in whatever way it defines success. Objectives may not be mutually exclusive because they might embrace 2 or more noncompeting objectives. Profit orientation is implemented by companies who focus on target profit pricing, maximizing profits or target return pricing. Firms implement target profit pricing when they have particular profit goals. If firms can specify a mathematical model that captures all the factors required to explain and predict sales and profits, it should be able to identify the price where profits are maximized. Target return pricing is when firms are less concerned with the level of profits but rather the rate at which their profits are generated relative to their investments. Employ pricing strategies designed to produce a specific return on their.
