1. UNIT-IV - PRODUCT PRICING Objectives of Pricing
MANAGERIAL ECONOMICS
UNIT-IV - PRODUCT PRICING
Objectives of Pricing
Dr.V.Prabakaran, AP/MBA - Product Pricing

2. Dr.V.Prabakaran, AP/MBA - Product Pricing
The price of a product or service is the number of monetary units a person pays to obtain one unit of the product or service.
Price = Cost + Profit
Dr.V.Prabakaran, AP/MBA - Product Pricing

3. Dr.V.Prabakaran, AP/MBA - Product Pricing
A company must set its price in relation to the value delivered and perceived by the customer
A firm must set a price for the first time when
It develops a new product
It introduces its regular product into a new distribution channel or geographical area
It enters bids on new contract work ( as in Industrial Sale )
Price communicates the value positioning of the product.
Dr.V.Prabakaran, AP/MBA - Product Pricing

4. Dr.V.Prabakaran, AP/MBA - Product Pricing
Pricing Objectives
Profit related objective
Sales Related objective
Competition related objective
Customer related objective
Other objective
Dr.V.Prabakaran, AP/MBA - Product Pricing

5. Profit related objective
Maximum current profit
Target return on investment
Dr.V.Prabakaran, AP/MBA - Product Pricing

6. Sales related objective
Sales growth
Increase market share
Dr.V.Prabakaran, AP/MBA - Product Pricing

7. Competition related objective
To face competition
To keep competitor away
To achieve quality leadership
To remove competitors from the market
Dr.V.Prabakaran, AP/MBA - Product Pricing

8. Customer related objective
To win confidence of customers
To satisfy customers
Dr.V.Prabakaran, AP/MBA - Product Pricing

9. Dr.V.Prabakaran, AP/MBA - Product Pricing
Other objective
Market penetration
Promoting new product
Maintaining image and reputation in the market
Survival and growth
Dr.V.Prabakaran, AP/MBA - Product Pricing

10. Dr.V.Prabakaran, AP/MBA - Product Pricing
Thanks…
Dr.V.Prabakaran, AP/MBA - Product Pricing