Pricing & Objectives of pricing | VNSGU | Business Administration for B.Com sem 4|

Описание: Pricing:
It is difficult to give a generally acceptable meaning of the term price. Ordinarily, it is interpreted to mean "money value received against exchange of goods or services"
For example, if a television set is exchanged against Rs. 4,000, the price of T. V. set is Rs. 4,000 per set. The term price indicates buyer's intensity of desire to purchase also. In other words, it may mean the price which buyers are willing to pay for a product, keeping in view its utility or usefulness to them.

Objectives of pricing :
(1)Return on Investment:
In many of the firms, this is the main objective of pricing. They try to fix price such that a definite return is obtained on the investment in different products or departments of the company, and the overall profit gives the targeted rate of return on total investment.

(2) Price Stability:
Some of the leading firms which care for long term interests of business, aim at price stability. Their attempt is not to let price fall too low during depression, nor let them rise too high during boom.

(3) To Maintain or Increase Market Share:
Behind this objective is the assumption that market share can be maintained only at a definite level of product price. Most of the firms are ready to reduce prices of their products, thereby they can increase their share in the market.

(4) To Meet Competition:
Every manufacturer has to adopt a price policy that helps him meet the competition in the market successfully. This objective compels a manufacturer not to charge a price higher than the competitor's prices.

(5) To Maximise Profits:
Price policy of the majority of the firms is in practice aimed at maximisation of profit. Of course, they may not accept it in public, because generally profit maximisation is believed to be associated with exploitation. But if profit maximisation is accepted as a long term objective, it is beneficial to the company and general public both.



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