Pricing Objectives

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Price Flashcards on Pricing Objectives, created by james.bowditch on 31/07/2013.
james.bowditch
Flashcards by james.bowditch, updated more than 1 year ago
james.bowditch
Created by james.bowditch over 10 years ago
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Resource summary

Question Answer
Survival When the organisation is in a position of sink or swim. Prices are reduced often to levels below cost to maintain sufficient flow of cash
ROI Significant level of return
Market Stabilisation Reduce leader retaliation
Maintenance and improvement of market position Defending current position and gradually increasing market share
Meeting or following competitors Entering companies into a market might take its lead in pricing from others until it is further established
Pricing to reflect product differentiation Pricing to create different perceptions of the products value and indirectly increase profits
Market Skimming Entering the market with a high price and gradually lowering
Market Penetration Adopting a far more aggressive approach in which prices are set deliberately low to ensure a high level of sales
Early cash recovery High cash flow leading to an early recovery of cash
Discouraging others from entering the market Deliberately setting a low price so that returns are low which simultaneously sends out signals about a willingness to engage in a price war with any new entrants
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