Pricing methods comprise of Product pricing methods and Service pricing methods. Price setting is influenced by market conditions. Main pricing objectives are, profit maximization, high market share, to attain status quo by stable price and meeting competition in the market.
Pricing methods are the combination of different marketing decision variables being used by the firm to market its goods and services. A break-even point is that quantity of output at which total revenue equals to total costs, assuming a certain selling price. Product’s price is an important factor in determining its market demand. Some firms use higher prices to transmit an image of superior quality and it is most likely to work well in the case of services and certain goods for which consumers have difficulty in judging quality. Pricing objectives are to achieve a targeted return, to profit maximization, to increase market shares, to stabilize prices and to meet the competition.
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