What methods might a firm use when pricing based on a profit orientation and how do they differ?
What will be an ideal response?
A firm may implement a profit orientation by focusing on target profit pricing, maximizing profits, or target return pricing. Target profit pricing is usually implemented when firms have a particular profit goal as their overriding concern. To meet this targeted profit objective, firms use price to stimulate a certain level of sales at a certain profit per unit. The maximizing profits strategy relies on a firm being able to accurately specify a mathematical model that captures all the factors required to explain and predict sales and profits, therefore identifying the price at which its profits are maximized. Finally, a firm interested in the rate at which its profits are generated relative to its investments will use a target return pricing method.
You might also like to view...
Successful database marketing emphasizes two things:
A) sales and contribution margin B) identifying customers and building relationships C) lifetime value of customers and data mining D) data mining and data coding
Explain how a pricing strategy may not change the literal sticker price of a product
What will be an ideal response?
Discuss the issue of giving notice to the employees about organizational downsizing.
What will be an ideal response?
The ____ would not affect the economic order quantity
a. company's weighted average cost of capital b. cost of purchase requisition forms c. cost of insuring inventory d. cost of a stockout