MGTA02H3 : study guide
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MGTA02H3 Full Course Notes
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Chapter 7: pricing and distributing goods and services. The price element of the marketing mix has become competitive. It influences both consumer demand for a product, and company profitability. Pricing: deciding what the company will receive in exchange for its product. Companies often price products to maximize profits, but also hope to attain other pricing objectives. 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. Pricing decisions are also influenced by the need to survive in the marketplace, by social and ethical concerns, and by corporate image. Companies try to set prices to sell the number of units that will generate the highest total profits. In calculating profits, managers weigh receipts against costs for materials and labour to create the product. They also consider the capital resources that the company must tie up to generate that level of profit.
