Impact of Corporate Strategies on Pricing Policies

[abhishreshthaa]

Confirm impact of Corporate Strategies on Pricing Policies


Organizational pricing objectives should be considered when pricing strategies are being developed on global markets.


A product ‘s appeal relative to competitive products should also be considered. The overall pricing goal must be to contribute to company sales and profit objectives worldwide.

Pricing objectives:

1] Survival: Low Prices to Cover Variable Costs and Some Fixed Costs to Stay in Business.


2] Current Profit Maximization: Choose the Price that Produces the Maximum Current Profit, Cash Flow or ROI.


3] Market Share Leadership: Low as Possible Prices to Become the Market Share Leader.


4] Product Quality Leadership: High Prices to Cover Higher Performance Quality and R & D.
In short, If pricing objective is:



Rate of return then use:: Market skimming


Market stabilisation:: Market penetration


Demand-led pricing:: Early cash recovery


Competition-led pricing:: Prevent new entry


Pricing to reflect product differentiation

 

[jitendra05]

Confirm impact of Corporate Strategies on Pricing Policies


Organizational pricing objectives should be considered when pricing strategies are being developed on global markets.


A product ‘s appeal relative to competitive products should also be considered. The overall pricing goal must be to contribute to company sales and profit objectives worldwide.

Pricing objectives:

1] Survival: Low Prices to Cover Variable Costs and Some Fixed Costs to Stay in Business.


2] Current Profit Maximization: Choose the Price that Produces the Maximum Current Profit, Cash Flow or ROI.


3] Market Share Leadership: Low as Possible Prices to Become the Market Share Leader.


4] Product Quality Leadership: High Prices to Cover Higher Performance Quality and R & D.
In short, If pricing objective is:



Rate of return then use:: Market skimming


Market stabilisation:: Market penetration


Demand-led pricing:: Early cash recovery


Competition-led pricing:: Prevent new entry


Pricing to reflect product differentiation

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