MGTA02H3 Chapter 7: Chapter 7
4 Apr 2011
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MGTA02H3 Full Course Notes
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Chapter 7 the 4 ps - p rice. pricing is deciding what the company will receive in exchange for its product. companies often price products to maximize profits, but they also hope to attain other pricing objectives. pricing objectives are goals that producers hope to attain in pricing products for sale. If prices are set too low, the company will probably sell many units of its product, but it may miss the opportunity to make additional profit on each unit and may in fact lose money on each exchange. 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. To avoid the above two, companies t ry to set prices to sell the number of units that will generate the highest possible total profits.
