Lightfoot, Inc, is an international shoe company that specializes in retailing medium-priced goods. Retail outlets are located throughout the world. Management wishes to create an image of giving the customer the most quality for the money spent
Selling prices are developed to attract customers away from competitors. End-of-the-month sales are a regular practice for all stores, with customers being accustomed to this practice. Company buyers are carefully trained and look for quality goods at lower prices. Competitors' prices are checked daily. Sales are targeted to increase a minimum of 7 percent per year. All sales yield a 12 percent return on assets. Sales personnel are expected to wear the company product, as well as appropriate clothing in order to properly display the product being sold. Personnel can purchase the shoes at 5 percent over cost. Cleanliness and professional appearance are required for all stores. Identify the pricing policy objectives of this company.
1. Objective: Charge prices that are socially acceptable.
Lightfoot wants to create an image of quality shoes for less money.
2. Objective: Adhere to price strategy and increase market share.
Competitors' prices are checked daily. Prices are set low in order to draw customers away from competitors, and discounted sales are a regular practice.
3. Objective: Maximize profits.
Buyers are trained to look for quality goods at lower prices.
4. Objective: Support trend of increased sales.
Sales are targeted to increase 7 percent per year.
5. Objective: Maintain minimum rate of return.
All sales are expected to yield a 12 percent return on assets.
Note: Seeing that employees dress appropriately and that the stores are kept clean are operational objectives, not pricing policy objectives.
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