Textbook Notes (362,809)
Canada (158,054)
MGTA01H3 (583)
Chapter 7

Chapter 7.doc

2 Pages
Unlock Document

University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Ch7 Pricing and Distributing Goods and Services Pricing Objectives and ToolsTermsPricing deciding what the company will receive in exchange for its productPricing objectives goals that producers hope to attain in pricing products for saleProfit Maximizing Objectives Pricing to maximize profits is trickyIf the price is set too low the company will probably sell many of its products but it may miss the opportunity to make additional profit on each unit and thus may in fact lose money on each exchangeConversely if prices are set too high the company will make a large profit on each item but will sell fewer units resulting in excess inventory and a need to reduce production operations This will also result in money lossTo avoid these problems companies try to set prices to sell the number of units that will generate the highest possible total profitsIn calculating profits managers weigh receipts against costs for materials and labour to create the productBut they may also consider the capital resources plant and equipment that the company must tie up to generate that level of profitThe cost of marketing such as maintaining a large sales staff can also be substantialConcern over the efficient use of these resources has led many firms to set prices so as to achieve a targeted level of return on sa
More Less

Related notes for MGTA01H3

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.