BU352 Chapter Notes - Chapter 11: Marketing Mix, Easy A, Price Fixing
Document Summary
Thus, a great but overpriced product can be judged as low in value and may not sell as well as an inferior but well-priced item. Prices rarely changed except in response to radical shifts in market conditions. Target profit pricing is used when they have a particular profit goal as their overriding concern where they use price to stimulate a certain level of sales at a certain profit per unit. Maximizing profits strategy: relies primarily on economic theory. Involves creating a mathematical model that captures all the factors required to explain and predict sales and profits, where it will tell you at what price its profits are maximized. Some firms may be more concerned about their overall market share than about dollar sales per se because they believe that market share better reflects their success relative to the market conditions than do sales alone.
