Pricing objectives

Pricing objectives (or goals) is a term used in marketing and economics to provide direction to the whole pricing process.^[1][2] This involves determining overall objectives that include the following: 1) the overall financial, marketing, and strategic objectives of the company; 2) the objectives of the product or brand; 3) consumer price elasticity and price points (the prevailing market condition); and 4) the resources available to the company.

Some of the more common pricing objectives are:

• maximize long-run profit
• maximize short-run profit
• increase sales volume (quantity)
• increase monetary sales
• increase market share
• obtain a target rate of return on investment (ROI)
• obtain a target rate of return on sales
• stabilize market or stabilize market price: an objective to stabilize price means that the marketing manager attempts to keep prices stable in the marketplace and to compete on non-price considerations. Stabilization of margin is basically a cost-plus approach in which the manager attempts to maintain the same margin regardless of changes in cost.
• company growth
• maintain price leadership
• desensitize customers to price
• discourage new entrants into the industry
• match competitors prices
• encourage the exit of marginal firms from the industry
• survival
• avoid government investigation or intervention
• obtain or maintain the loyalty and enthusiasm of distributors and other sales personnel
• enhance the image of the firm, brand, or product
• be perceived as “fair” by customers and potential customers
• create interest and excitement about a product
• discourage competitors from cutting prices
• use price to make the product “visible"
• help prepare for the sale of the business (harvesting)
• social, ethical, or ideological objectives

• Price
• Price controls
• Price fixing
• Price gouging
• Just price
• Resale price maintenance
• Pricing
• Pricing strategies

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