Practicing Success
Which one of the following factors is NOT relevant to price fixation? |
Obtaining market leadership Value for money Product differentiation Age of an organisation |
Age of an organisation |
Apart from profit maximisation, the pricing objectives of a firm may include: (a) Obtaining Market Share Leadership: If a firms objective is to obtain larger share of the market; it will keep the price of its products at lower levels so that greater number of people are attracted to purchase the products; (b) Surviving in a Competitive Market: If a firm is facing difficulties in surviving in the market because of intense competition or introduction of a more efficient substitute by a competitor, it may resort to discounting its products or running a promotion campaign to liquidate its stock; and (c) Attaining Product Quality Leadership: In this case, normally higher prices are charged to cover high quality and high cost of Research and Development. Thus, the price of a firm’s products and services is affected by the pricing objective of the firm. |