MGTA01H3 Chapter Notes -Price Skimming, Psychological Pricing

• School: UTSC
• Department: Management (MGT)
• Course: MGTA01H3
• Professor: Chris Bovaird

Document Summary

Ch7-price: pricing: deciding what the company will receive in exchange for its product, pricing objectives: goals that producers hope to attain in pricing products for sale. -some firms want to dominate the market or secure high market share: profit-maximizing objectives. Cant set prices too low or too high. Companies try to set prices to sell the number of units that will generate the highest possible total profits: in the long run, a business must make a profit to survive. Many companies set low prices for new products. They are willing to accept minimal profits even losses to get buyers to try products. In other words, they use pricing to establish market share: a company"s percentage of the total market sales for a specific product: whatever a company"s objectives, managers must measure the potential impact before deciding on final prices. Two basic price-setting tools used for this purpose are: cost- oriented pricing and break-even analysis: 1.