Management and Organizational Studies 2320A/B Lecture Notes - Lecture 8: Pricing Strategies, Target Costing, Price Fixing

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2320A/B
• Professor: Alex Mc Dougall

Document Summary

We define price as the overall sacrifice a consumer is willing to make to acquire a specific product or service. Includes the money that must be paid, but may involve other sacrifices. Price is the only element of the marketing mix that generates revenue. Consumers usually ran price as one of the most important factors in purchasing decision. Specific objectives usually reflect how the firm intends to grow. Profit orientation by focusing on target pricing, maximizing profits, or target return pricing: target profit pricing when they have a particular profit goal as their overridden concern. Firms use price to stimulate a certain level of sales at a certain profit per unit: maximizing profits strategy relies primarily on economic theory. Competitor orientation they strategize according to the premise that they should measure themselves primarily against their competition: competitive parity means they set prices that are similar to those of major competitors.