MGTA02H3 Chapter Notes - Chapter 7: Psychological Pricing, Price Skimming, Pricing Strategies

• School: UTSC
• Department: Management (MGT)
• Course: MGTA02H3
• Professor: Bovaird/ Mc Conkey/ Lawrence

Document Summary

Price influences both consumer demand for a product and company profitability. 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. If prices are too low, the company will probably sell many units of its product, but will miss the opportunity to make additional profit on each unit (possibly lose money on each exchange) If prices are set too high, the company will make a large profit on each item but will sell few units, resulting in excess inventory and a need to reduce production operations (lose money) Concern over the efficient use of these resources has led many firms to set prices so as to achieve a targeted level of return on sales or capital investment. Ebusineses are lowering both costs and prices because of the internet"s unique marketing capabilities.