MKTG 2P91 Study Guide - Profit Maximization, Pricing Strategies, Marketing Mix
Document Summary
Pricing objectives and the marketing mix: profitability objectives. Marketers at firms must set prices with profits in mind. For customers to pay the set price, they must be convinced they are receiving fait value for their money. Marketers must be able to balance between desired profits and the customer"s perception of a products value. Marketers should evaluate and adjust prices continually to accommodate changes in the environment. Marginal analysis is the method of analyzing the relationship among costs, sales price, and increased sales volume. Profit maximization is the point at which the additional revenue gained by increasing the price of a product equals the increase in total cost. Marketers commonly set target return objectives, which are short or long run pricing objectives of achieving a specified return on either sales or investment: prestige pricing. Prestige pricing establishes a relatively high price to develop and maintain an image of quality and exclusiveness that appeals to status conscious consumers.
